8 ms·

I think it's worth occasionally thinking of the "economy" in simple terms, especially for the wider middle class. There are relatively few broad categories that

I think it's worth occasionally thinking of the "economy" in simple terms, especially for the wider middle class. There are relatively few broad categories that make up most of our economic lives. For most people the "economy" mostly consists of (0) their job/income (1) food/consumable (2) stuff/durables (3) transport (4) vital services: health, education, etc. (5) housing. 1 & 2 are well served by free markets, and industrial capitalism^. We're "rich" in these. 3 & 4 are not, and are generally managed by governments. The long term trend is decent-ish though. Medicine, education and such have grown over the decades and people get more of this. Housing is in many places (mostly successful cities) the economic disaster. Fully exposed to financialization, business cycles, inflation prone. Rather than signalling to supply, prices adjust to whatever the median person can afford to pay. Meanwhile, the whole market acts a mechanism transferring wealth up the generations & economic classes. Especially in europe, the whole thing is stagnant too. Modern planning doesn't seem much better than old planning. Modern building is not much better/cheaper than old building. It seems that we have less ability to deliver on larger & more ambitious projects than they did 100 years ago. Interestingly, this generational stagnation seems to hold for both the liberal and ex-communist parts of europe. No one wants to go back to soviet supermarkets, cars or electronics. Soviet housing system...? opinions vary. Housing is the biggest problem in our economic lives. ^excepting mattresses :)

daanlo 9y ago
From a German perspective, I can say that costs of building a house are rising mainly due to new legislation around CO2 reduction and fire safety. In a time when producing most goods is getting cheaper through technology, cost of house conatruction is rising. There also doesn't seem to be much innivation in the building industry.
- baxtr 9y ago
  Adding a German perspective: this might be one factor among many. Other factors include - land owners who wait to sell at even higher prices - drastically reduced social housing construction (Sozialer Wohnbau) - heavy influx of foreign capital (at least in major cities) reducing existing capacities - missing holistic development concepts/strategies (one big exception is probably the Bahnstadt in Heidelberg) - on average, low building height in city centers The whole topic just hasn’t been a top priority lately and we’re moving way too slow to change that
  - ed_blackburn 9y ago
    Sounds just like London. I would hazard a guess these symptoms are common.
  - Roritharr 9y ago
    What i've lately dreamed about doing is a city-building Kickstarter. You take a piece of undeveloped land in Germany, buy it for cheap and then let people & companies pledge money to build housing at building cost with the requirement that it has to be used by the owner himself, until you get enough for a 500k-1M people city. I'd love to live in a city where every inhabitant is an owner, something drastically different than the rest of Germany. It's just a dream with a lot of big holes, i'd love to hear how to make this viable.
    - tormeh 9y ago
      You can just move to Oslo. Norway doesn't have a functioning rental market. It's because of big tax advantages for homeowners and social stigma for renters. The grass is always greener on the other side. I prefer German cities.
    - dalbasal 9y ago
      This something only a government could really do. Housing is nowhere near a free market. Public decisions control what can be built/rebuilt & where, essentially dictating "supply". It's also public infrastructure, services and wider economic policies that determine the value of that supply to consumers. A quasi-laissez faire housing market can work. The US has many of them, in the geographically unrestricted cities like phoenix or.. lots of cities. The city/country builds roads. Land gets parceled into 1,000 - 5,000 sqm blocks and cheap houses are built on them, starting at $100k + taxes and land which are cheap relative to europe. This can produce almost unlimited (given unlimited space) housing. Infrastructure is very basic: roads, sewage, etc. They usually don't have sidewalks, nevermind trams. They also produce low-density sprawl. As things get tighter, more and more burden is on cities to plan, provide infrastructure. Rights compete. In theory, land efficiency and shorter transit distances should balance this out. In practice, land prices (enriched by infrastructure & proximity) generally outpace these efficiencies so house prices are higher anyway. Governments also limit supply in dense areas, because they can't keep up with the infrastructure requirements. Truly revolutionary projects out of scope for private investors. First, horizons are too long. They can't wait 15 years for the value to emerge. Second, the governments' parts in the game (infrastructure & planning) is more important than private money's. Third, the money is too big, even for today's giant piles of cash. A small city (100k people) would cost 10bn to build, at least.
- tormeh 9y ago
  Building costs are negligible next to land costs.
mantas 9y ago
> Soviet housing system...? opinions vary. Opinions vary for those who were exposed to privileged side only. In reality, most people had to wait decades for an apartment. There was an easy way to get an apartment though - get sent to bumfuck nowhere for infrastructure project (military base or factory, nuclear plant etc..). Or climb up the party ladder or get a job at well-connected company than get arrange you an apartment. On top of that, many people were stuck in Kolchoz without any prospect of moving to a city. Thus were was no pressure to the system. If a city can't take in people - they're not sent in..
- freeflight 9y ago
  > Opinions vary for those who were exposed to privileged side only. That's completely opposite to my experience in the GDR. Neither my aunt nor my grandparents had to wait "decades" to move into their Plattenbau apartments and I can assure you neither of them had been on the "privileged side", their Stasi files make that pretty clear. For my grandparents it was a giant step up in terms of living conditions, previously they lived in an old house that didn't even have running water in the toilets. In contrast to that, the Plattenbau apartments had very modern design and interiors, they are still living there happily to this day.
  - kingofhdds 9y ago
    The starting comment in the thread explicitly mentions "Soviet". I cannot say much about GDR, but as for USSR, Mantas is right. Soviets controlled 100% of employment options, and restricted movements of citizens - and that was their approach to urban planning. Which in the end didn't work well anyway, as my parents waited for an apartment for more then 20 years, and finally USSR collapsed before it happened :-) By the way, I guess GDR was not that different in the idea, it's just that lesser territory, and population made the approach less catastrophic.
    - freeflight 9y ago
      Imho the GDR was just another extension of the Soviet Union, sovereign in theory only. Otherwise the "Iron Curtain" wouldn't have gone up where it did, splitting Germany in half. Of course, the GDR also saw its fair share of cronyism with all of its injustices, like they exist everywhere, but the Plattenbauten are still held in high regard by many East-Germans. Maybe the Soviet approach wasn't actually that catastrophic it just didn't scale that well when applied to the more populated and bigger eastern bloc states compared to the GDR? GDR wasn't that big, so not that much need to force people to move around.
neilwilson 9y ago
There can never be enough jobs for everybody with 'free markets'. Structurally there can only ever be 95 jobs for every 100 people. Inflation is controlled by an unemployment buffer - because matching people to jobs doesn't clear a market in a world with full time jobs.
- macspoofing 9y ago
  That makes no sense. Labour shortage is a real thing.
thriftwy 9y ago
Soviet housing worked by building a huge number of small and medium cities while trying to limit number of people moving into capital and other desirable cities. Guess what? After collapse of communism, housing in small cities depreciate rapidly, while housing in capitals skyrocket. There's much many more small cities than there's economic demand for, hence not enough jobs in those. EDIT: Even when new factories are built by capital, they are usually not in small cities in the middle of nowhere with limited worker pool, but on outskirts of medium-to-large cities in comfortable distance of capital/large city (think Tesla Factory). This makes small cities unfit for anything other than eco-tourism. Of course it applies more to large countries, since small ones (like Montenegro) just never had the quantities of population to form too many extra cities.
macspoofing 9y ago
>Housing is in many places (mostly successful cities) the economic disaster. Fully exposed to financialization, business cycles, inflation prone. Rather than signalling to supply, prices adjust to whatever the median person can afford to pay Why should housing not be to governed by market forces? Housing shortages are due to regulations, from limiting new development outright, to limiting high density buildings, to heavy rent control (disincentivizing investment and maintenance), to regulations that just make housing investment expensive. Reasonable regulations should be the guideline, but they aren't. The most aggregious local example is San Francisco. Soviet housing never worked. More to the point the wait lists for apartments was measured in years (ripe for corruption). The buildings were shoddy and depressing (hope you like grey). Urban planning was haphazard and may or not may have corresponded to where people actually wanted to live.
- seanmcdirmid 9y ago
  Many supply restrictions are geographic rather than based on regulation. Also, Singapore has a semi-socialized system that seems to work.
  - macspoofing 9y ago
    >Many supply restrictions are geographic rather than based on regulation. That's true. At the end of the day there are only so many desirable beachfront properties, or direct views on Central Park. Those are going to be expensive. >Singapore has a semi-socialized system that seems to work. I know very little about Singapore, but I'll make two comments: 1) I'm skeptical about the feasibility of models that work in tiny regions with very specific constraints and applying them to big nations. But maybe there's something there to learn from. 2) At the end of the of the day, it's not magic. You have a lot of people, in a relatively small geographic area - you need to focus on density. You don't need a heavily socialized system to build dense housing - you just need to align regulations.
    - seanmcdirmid 9y ago
      Singapore is dense like NYC is, and, outside of its public housing program, is equally, if not more, expensive than NYC. Singapore is otherwise a very capitalistic country, and its housing program is basically ownership with restrictions that fade overtime. But more to the point: every super dense city I’ve lived in has had more expensive housing than the lesser dense cities I’ve lived in. Obviously something else is going on, density itself isn’t magic.
maxerickson 9y ago
The planning commission in my small town recently blocked a $10 million apartment building that would have mostly been cheaper housing. Some directly stated that they didn't want the poor people living in the area, which is stupid because they already live there (demographically it's already the poorest zone in the county). A few others said they didn't want to disturb the historical character of the shabby, decades old commercial building that is currently on the site. The real reason is that they don't consider reducing housing prices a good outcome. Which is just bonkers. Variations of that problem will repeat all over the place. Entrenched interests are often at odds with the policies that would serve the larger group of people (and even be economically beneficial...).
- FreakyT 9y ago
  > The real reason is that they don't consider reducing housing prices a good outcome. I think this is the key. If you're a property owner, any outcome that reduces the value of your property is naturally a negative outcome. A rational economic actor, in that case, would always oppose anything that would reduce housing costs. It's a tough problem to combat, because what can be done? Barring property owners from participating in local governance?
  - jdavis703 9y ago
    Well you could add a conflict of interest clause. If the thing you're testifying on impacts the property value of your home then you must state that up front. Further, such rational economic thinking isn't really that rational. For example next to my home is a tent encampment. That certaintly doesn't increase property values and could easily be fixed by say building some affordable micro-apartments on that plot of land.
  - russell_h 9y ago
    Bar local government from implementing housing policy.
  - repsilat 9y ago
    Building a big tower could decrease your property value, but upzoning and by-right construction should increase property values (because now the person who wants to buy your house wants to replace it with more than one house.) Local government being able to stop individual projects rather than setting policy could be the problem. Maybe.
rb808 9y ago
Its important to think about what the problem really is. Right now many people are moving to the big cities, and the big cities have expensive housing. To me the real problem is why people want to live in a handful of big cities instead of cheaper regions. If its true that there is no choice but to live in big cities then the current high prices really aren't a problem, its just that is where the money is. Manhattan is a great example, lots of high density development and it still isn't cheap.
- dalbasal 9y ago
  I think you're right and this is an important point. We tend to be pretty parochial in our views, very influenced by our ideas about what is wrong with our local markets. There are scarce-few examples of things gone right. That's why Tokyo is relevant. That said, Tokyo has experienced relatively little population growth, Japan has experienced none and Japan hasn't had asset inflation and/or big economic growth for a long time. One example is good, but I'd prefer to have several. Preferably one or two in real growth cities. You are right though. We have plenty of dense-but-still-expensive examples proving that density alone does not guarantee much.
- jdavis703 9y ago
  Tokyo has an increasing population due to increasing urbanization, and yet as the article claims, housing demand has remained relatively stable. We can have increasing urbanization in the west too without the crazy housing prices. Further one reason people want to live in just a few cities is because people don't want to be treated like outsiders. I know I'll probably be downvoted for saying this, but I grew up in Virginia but moved to California shortly after college. There's far less overt racism here than back home. I've also been to many rust belt cities, and can say I'm fairly certain those places are about the same as the U.S. South. For me at least, the subjective experience of racism is a reason why there are only a handful of US cities I'd live in.
- knuththetruth 9y ago
  But, in relation to Japan, the same holds true. Most people move towards a few urban areas for jobs. And they build housing for them. The difference in America are the inequities between the wealthy and everyone else. The belief that it’s somehow just or moral to arrange society this way, to build entire cities that can’t function without the labor of poor people, but where they can’t afford to live or easily commute into on public transportation. That these aren’t problems that we should collectively solve, but just another disparity from which the rich can profit.
conanbatt 9y ago
Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. The two single most important factors that make housing not behave efficiently as a market are zoning and taxation. Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem for the market as the championing difference. Taxation is the second one. No matter how much you build, the people and the space require considerable resources to manage: sewage, garbage, public transportation, local courts ,etc. If you tax income, the more people you cram, and the more the expenditure of the government is, the more oppressive becomes rent. That is because as a dweller, you pay taxes that go to services that increase your rent. This great injustice is described in the book "Poverty and Progress" by henry george in the 1900's in california, where the concept of Land Value Tax was created and then validated by economists on the left (Krugman) and the right (Milton Friedman). You would not see any problems with local neighbors in San Francisco if instead of state income taxes and sales taxes they moved that to land value taxes, and suddenly the guy with the picturesque 1920 house for himself will find that his taxes look like a monthly rent. The biggest problems of housing, much like the biggest problems on almost any market, come from the government, not for the peculiarities of the market itself.
- dalbasal 9y ago
  >> Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. IDK if you can just take that as a premise. I think we've had a body of evidence, hard to refute, suggesting that laissez faire markets improve industrial output.. substantially. Not necessarily pure laissez faire, but the effective systems seems to have effective price systems, and private profits. Post 80s China, West vs east europe in the 70s & 80s. There are other sectors with good evidence too. Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope. Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards. I just don't think that housing is like furniture or smartphone manufacturing. I don't think you can refer to the same lines of reasoning.
petra 9y ago
Germany seemed to have solved that problem - their real-estate costs are very stable - rising on average only 0.05% per year in 1970-2003. The how is somewhat complex , google 'Evans hartwich better homes greener cities' pg 13. On mobile so it's complicated to link to a PDF search result.

daanlo 9y ago

From a German perspective, I can say that costs of building a house are rising mainly due to new legislation around CO2 reduction and fire safety. In a time when producing most goods is getting cheaper through technology, cost of house conatruction is rising. There also doesn't seem to be much innivation in the building industry.

baxtr 9y ago
Adding a German perspective: this might be one factor among many. Other factors include - land owners who wait to sell at even higher prices - drastically reduced social housing construction (Sozialer Wohnbau) - heavy influx of foreign capital (at least in major cities) reducing existing capacities - missing holistic development concepts/strategies (one big exception is probably the Bahnstadt in Heidelberg) - on average, low building height in city centers The whole topic just hasn’t been a top priority lately and we’re moving way too slow to change that
- ed_blackburn 9y ago
  Sounds just like London. I would hazard a guess these symptoms are common.
- Roritharr 9y ago
  What i've lately dreamed about doing is a city-building Kickstarter. You take a piece of undeveloped land in Germany, buy it for cheap and then let people & companies pledge money to build housing at building cost with the requirement that it has to be used by the owner himself, until you get enough for a 500k-1M people city. I'd love to live in a city where every inhabitant is an owner, something drastically different than the rest of Germany. It's just a dream with a lot of big holes, i'd love to hear how to make this viable.
  - tormeh 9y ago
    You can just move to Oslo. Norway doesn't have a functioning rental market. It's because of big tax advantages for homeowners and social stigma for renters. The grass is always greener on the other side. I prefer German cities.
  - dalbasal 9y ago
    This something only a government could really do. Housing is nowhere near a free market. Public decisions control what can be built/rebuilt & where, essentially dictating "supply". It's also public infrastructure, services and wider economic policies that determine the value of that supply to consumers. A quasi-laissez faire housing market can work. The US has many of them, in the geographically unrestricted cities like phoenix or.. lots of cities. The city/country builds roads. Land gets parceled into 1,000 - 5,000 sqm blocks and cheap houses are built on them, starting at $100k + taxes and land which are cheap relative to europe. This can produce almost unlimited (given unlimited space) housing. Infrastructure is very basic: roads, sewage, etc. They usually don't have sidewalks, nevermind trams. They also produce low-density sprawl. As things get tighter, more and more burden is on cities to plan, provide infrastructure. Rights compete. In theory, land efficiency and shorter transit distances should balance this out. In practice, land prices (enriched by infrastructure & proximity) generally outpace these efficiencies so house prices are higher anyway. Governments also limit supply in dense areas, because they can't keep up with the infrastructure requirements. Truly revolutionary projects out of scope for private investors. First, horizons are too long. They can't wait 15 years for the value to emerge. Second, the governments' parts in the game (infrastructure & planning) is more important than private money's. Third, the money is too big, even for today's giant piles of cash. A small city (100k people) would cost 10bn to build, at least.
tormeh 9y ago
Building costs are negligible next to land costs.

mantas 9y ago

> Soviet housing system...? opinions vary. Opinions vary for those who were exposed to privileged side only. In reality, most people had to wait decades for an apartment. There was an easy way to get an apartment though - get sent to bumfuck nowhere for infrastructure project (military base or factory, nuclear plant etc..). Or climb up the party ladder or get a job at well-connected company than get arrange you an apartment. On top of that, many people were stuck in Kolchoz without any prospect of moving to a city. Thus were was no pressure to the system. If a city can't take in people - they're not sent in..

freeflight 9y ago
> Opinions vary for those who were exposed to privileged side only. That's completely opposite to my experience in the GDR. Neither my aunt nor my grandparents had to wait "decades" to move into their Plattenbau apartments and I can assure you neither of them had been on the "privileged side", their Stasi files make that pretty clear. For my grandparents it was a giant step up in terms of living conditions, previously they lived in an old house that didn't even have running water in the toilets. In contrast to that, the Plattenbau apartments had very modern design and interiors, they are still living there happily to this day.
- kingofhdds 9y ago
  The starting comment in the thread explicitly mentions "Soviet". I cannot say much about GDR, but as for USSR, Mantas is right. Soviets controlled 100% of employment options, and restricted movements of citizens - and that was their approach to urban planning. Which in the end didn't work well anyway, as my parents waited for an apartment for more then 20 years, and finally USSR collapsed before it happened :-) By the way, I guess GDR was not that different in the idea, it's just that lesser territory, and population made the approach less catastrophic.
  - freeflight 9y ago
    Imho the GDR was just another extension of the Soviet Union, sovereign in theory only. Otherwise the "Iron Curtain" wouldn't have gone up where it did, splitting Germany in half. Of course, the GDR also saw its fair share of cronyism with all of its injustices, like they exist everywhere, but the Plattenbauten are still held in high regard by many East-Germans. Maybe the Soviet approach wasn't actually that catastrophic it just didn't scale that well when applied to the more populated and bigger eastern bloc states compared to the GDR? GDR wasn't that big, so not that much need to force people to move around.

neilwilson 9y ago

There can never be enough jobs for everybody with 'free markets'. Structurally there can only ever be 95 jobs for every 100 people. Inflation is controlled by an unemployment buffer - because matching people to jobs doesn't clear a market in a world with full time jobs.

macspoofing 9y ago
That makes no sense. Labour shortage is a real thing.

thriftwy 9y ago

Soviet housing worked by building a huge number of small and medium cities while trying to limit number of people moving into capital and other desirable cities. Guess what? After collapse of communism, housing in small cities depreciate rapidly, while housing in capitals skyrocket. There's much many more small cities than there's economic demand for, hence not enough jobs in those. EDIT: Even when new factories are built by capital, they are usually not in small cities in the middle of nowhere with limited worker pool, but on outskirts of medium-to-large cities in comfortable distance of capital/large city (think Tesla Factory). This makes small cities unfit for anything other than eco-tourism. Of course it applies more to large countries, since small ones (like Montenegro) just never had the quantities of population to form too many extra cities.

macspoofing 9y ago

>Housing is in many places (mostly successful cities) the economic disaster. Fully exposed to financialization, business cycles, inflation prone. Rather than signalling to supply, prices adjust to whatever the median person can afford to pay Why should housing not be to governed by market forces? Housing shortages are due to regulations, from limiting new development outright, to limiting high density buildings, to heavy rent control (disincentivizing investment and maintenance), to regulations that just make housing investment expensive. Reasonable regulations should be the guideline, but they aren't. The most aggregious local example is San Francisco. Soviet housing never worked. More to the point the wait lists for apartments was measured in years (ripe for corruption). The buildings were shoddy and depressing (hope you like grey). Urban planning was haphazard and may or not may have corresponded to where people actually wanted to live.

seanmcdirmid 9y ago
Many supply restrictions are geographic rather than based on regulation. Also, Singapore has a semi-socialized system that seems to work.
- macspoofing 9y ago
  >Many supply restrictions are geographic rather than based on regulation. That's true. At the end of the day there are only so many desirable beachfront properties, or direct views on Central Park. Those are going to be expensive. >Singapore has a semi-socialized system that seems to work. I know very little about Singapore, but I'll make two comments: 1) I'm skeptical about the feasibility of models that work in tiny regions with very specific constraints and applying them to big nations. But maybe there's something there to learn from. 2) At the end of the of the day, it's not magic. You have a lot of people, in a relatively small geographic area - you need to focus on density. You don't need a heavily socialized system to build dense housing - you just need to align regulations.
  - seanmcdirmid 9y ago
    Singapore is dense like NYC is, and, outside of its public housing program, is equally, if not more, expensive than NYC. Singapore is otherwise a very capitalistic country, and its housing program is basically ownership with restrictions that fade overtime. But more to the point: every super dense city I’ve lived in has had more expensive housing than the lesser dense cities I’ve lived in. Obviously something else is going on, density itself isn’t magic.

maxerickson 9y ago

The planning commission in my small town recently blocked a $10 million apartment building that would have mostly been cheaper housing. Some directly stated that they didn't want the poor people living in the area, which is stupid because they already live there (demographically it's already the poorest zone in the county). A few others said they didn't want to disturb the historical character of the shabby, decades old commercial building that is currently on the site. The real reason is that they don't consider reducing housing prices a good outcome. Which is just bonkers. Variations of that problem will repeat all over the place. Entrenched interests are often at odds with the policies that would serve the larger group of people (and even be economically beneficial...).

FreakyT 9y ago
> The real reason is that they don't consider reducing housing prices a good outcome. I think this is the key. If you're a property owner, any outcome that reduces the value of your property is naturally a negative outcome. A rational economic actor, in that case, would always oppose anything that would reduce housing costs. It's a tough problem to combat, because what can be done? Barring property owners from participating in local governance?
- jdavis703 9y ago
  Well you could add a conflict of interest clause. If the thing you're testifying on impacts the property value of your home then you must state that up front. Further, such rational economic thinking isn't really that rational. For example next to my home is a tent encampment. That certaintly doesn't increase property values and could easily be fixed by say building some affordable micro-apartments on that plot of land.
- russell_h 9y ago
  Bar local government from implementing housing policy.
- repsilat 9y ago
  Building a big tower could decrease your property value, but upzoning and by-right construction should increase property values (because now the person who wants to buy your house wants to replace it with more than one house.) Local government being able to stop individual projects rather than setting policy could be the problem. Maybe.

rb808 9y ago

Its important to think about what the problem really is. Right now many people are moving to the big cities, and the big cities have expensive housing. To me the real problem is why people want to live in a handful of big cities instead of cheaper regions. If its true that there is no choice but to live in big cities then the current high prices really aren't a problem, its just that is where the money is. Manhattan is a great example, lots of high density development and it still isn't cheap.

dalbasal 9y ago
I think you're right and this is an important point. We tend to be pretty parochial in our views, very influenced by our ideas about what is wrong with our local markets. There are scarce-few examples of things gone right. That's why Tokyo is relevant. That said, Tokyo has experienced relatively little population growth, Japan has experienced none and Japan hasn't had asset inflation and/or big economic growth for a long time. One example is good, but I'd prefer to have several. Preferably one or two in real growth cities. You are right though. We have plenty of dense-but-still-expensive examples proving that density alone does not guarantee much.
jdavis703 9y ago
Tokyo has an increasing population due to increasing urbanization, and yet as the article claims, housing demand has remained relatively stable. We can have increasing urbanization in the west too without the crazy housing prices. Further one reason people want to live in just a few cities is because people don't want to be treated like outsiders. I know I'll probably be downvoted for saying this, but I grew up in Virginia but moved to California shortly after college. There's far less overt racism here than back home. I've also been to many rust belt cities, and can say I'm fairly certain those places are about the same as the U.S. South. For me at least, the subjective experience of racism is a reason why there are only a handful of US cities I'd live in.
knuththetruth 9y ago
But, in relation to Japan, the same holds true. Most people move towards a few urban areas for jobs. And they build housing for them. The difference in America are the inequities between the wealthy and everyone else. The belief that it’s somehow just or moral to arrange society this way, to build entire cities that can’t function without the labor of poor people, but where they can’t afford to live or easily commute into on public transportation. That these aren’t problems that we should collectively solve, but just another disparity from which the rich can profit.

conanbatt 9y ago

Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. The two single most important factors that make housing not behave efficiently as a market are zoning and taxation. Zoning because it puts limits on what can be built, which means the process to expand is now bureaucratic. The original article talks about how in tokyo zoning hasnt been a problem for the market as the championing difference. Taxation is the second one. No matter how much you build, the people and the space require considerable resources to manage: sewage, garbage, public transportation, local courts ,etc. If you tax income, the more people you cram, and the more the expenditure of the government is, the more oppressive becomes rent. That is because as a dweller, you pay taxes that go to services that increase your rent. This great injustice is described in the book "Poverty and Progress" by henry george in the 1900's in california, where the concept of Land Value Tax was created and then validated by economists on the left (Krugman) and the right (Milton Friedman). You would not see any problems with local neighbors in San Francisco if instead of state income taxes and sales taxes they moved that to land value taxes, and suddenly the guy with the picturesque 1920 house for himself will find that his taxes look like a monthly rent. The biggest problems of housing, much like the biggest problems on almost any market, come from the government, not for the peculiarities of the market itself.

dalbasal 9y ago
>> Every market has its own peculiarities, and housing much like anything benefits enormously from behaving like a free one. IDK if you can just take that as a premise. I think we've had a body of evidence, hard to refute, suggesting that laissez faire markets improve industrial output.. substantially. Not necessarily pure laissez faire, but the effective systems seems to have effective price systems, and private profits. Post 80s China, West vs east europe in the 70s & 80s. There are other sectors with good evidence too. Housing...? I think that we've seen laissez faire markets can build a certain type of city (car-suburb) in certain conditions (green-field). In cities that already exist... IDk. Housing in europe is not that much better now that socialism is gone. The stuff in the house, way better. The house, nope. Free markets work well when there are nicely sloping supply and demand curves, plenty of competition, and coordination can happen via prices. Price systems can't coordinate the infrastructure & public service requirements of cities. They can't usually affect supply much. All they can do is "allocate" a limited supply, based on wealth. Allocation always happens, whether you use ration cards or markets. At this point, I think half the population might prefer ration cards. I just don't think that housing is like furniture or smartphone manufacturing. I don't think you can refer to the same lines of reasoning.

petra 9y ago

Germany seemed to have solved that problem - their real-estate costs are very stable - rising on average only 0.05% per year in 1970-2003. The how is somewhat complex , google 'Evans hartwich better homes greener cities' pg 13. On mobile so it's complicated to link to a PDF search result.