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If you want to make housing affordable you will need to reckon with this: http://positivemoney.org/wp-content/uploads/2013/04/UK-House-Prices-1997-2014.png http

If you want to make housing affordable you will need to reckon with this: http://positivemoney.org/wp-content/uploads/2013/04/UK-House-Prices-1997-2014.png http://positivemoney.org/wp-content/uploads/2013/04/UK-House... House prices move with mortgage credit growth. Credit growth is one of the key pillars of the politically sustained Ponzi-scheme that is the modern urban housing market.

flaque 8y ago
That is one crap graph. What’s the Y axis?
- iamdave 8y ago
  I'm going to guess using the context clue of the title of the graph that it's the average cost of a house in thousands?
  - jgraham 8y ago
    Pretty sure it must be percentage of the 1997 value, otherwise it's hard to understand how the scale can accomodate both house prices and population in a single set of units.
maxxxxx 8y ago
Easy access to credit drives up prices also in health care and education.
mywittyname 8y ago
Banks love mortgages because they are easy, safe ways to earn a bit more than the federal rate. Wealthy consumers love mortgages because it's a cheap way to leverage a huge asset for market-rate returns. Normal consumers love mortgages because it allows them to buy a house. Good luck taking that away. Additionally, while access to credit raises housing prices, there's no guarantee that removing access to that credit will in any way make housing more affordable for moderate- or low-income people. More people would be forced to rent and it's possible that the wealthy apartment owners will engage in rent seeking and rents will just raise to match or exceed the cost of a mortgage. That will rob lower income people of their biggest opportunity for wealth creation (housing appreciation) and increase wealth inequality.
- Sileni 8y ago
  But you're ignoring the fact that people are already being priced out of the housing market. The market only continues to gain steam while the next generation can reasonably shoulder the burden being placed on them by the previous. Otherwise those assets are going to deprecate. Credit allowed a handful of people to become incredibly wealthy by becoming rent seekers, while most people didn't realize they had the opportunity. The general consensus seems to be "Tough shit if you weren't born in the 60's - 70's". I don't see that ending well for the economy as a whole.
  - mrec 8y ago
    Yes. Here in the UK, I have a lot of sympathy with the view that Corbyn's Labour would deliver debt-funded jam today by dumping the burden onto future taxpayers, but the Conservatives have been doing the exact same thing for their own clients, via property inflation.
    - mendelsd 8y ago
      "Land by its nature is scarce. A site in Mayfair cannot be reproduced like a pair of shoes. The monopoly rent it commands plays no productive role. It acts as a private tax on the productive economy. The question has always been what can be done about it." [1] I posted that quote because it's the reference I found most speedily to the idea that high land prices impose private (i.e. paid into the private sector) taxation, rather than public. You didn't make the distinction between public vs private taxation in your comment and I thought it should be made. Public taxation is also involved of course, e.g. when governments need to bail out the banking system; Help to Buy in the UK; etc. [1] https://blog.p2pfoundation.net/how-land-property-is-tied-to-inequality-the-uk-example/2014/10/24 https://blog.p2pfoundation.net/how-land-property-is-tied-to-...
      - mrec 8y ago
        > high land prices impose private (i.e. paid into the private sector) taxation, rather than public Agreed, though I'm not sure that's much consolation to the ones paying it. With public taxation at least you can hope you're helping to fund something useful.

flaque 8y ago

That is one crap graph. What’s the Y axis?

iamdave 8y ago
I'm going to guess using the context clue of the title of the graph that it's the average cost of a house in thousands?
- jgraham 8y ago
  Pretty sure it must be percentage of the 1997 value, otherwise it's hard to understand how the scale can accomodate both house prices and population in a single set of units.

maxxxxx 8y ago

Easy access to credit drives up prices also in health care and education.

mywittyname 8y ago

Banks love mortgages because they are easy, safe ways to earn a bit more than the federal rate. Wealthy consumers love mortgages because it's a cheap way to leverage a huge asset for market-rate returns. Normal consumers love mortgages because it allows them to buy a house. Good luck taking that away. Additionally, while access to credit raises housing prices, there's no guarantee that removing access to that credit will in any way make housing more affordable for moderate- or low-income people. More people would be forced to rent and it's possible that the wealthy apartment owners will engage in rent seeking and rents will just raise to match or exceed the cost of a mortgage. That will rob lower income people of their biggest opportunity for wealth creation (housing appreciation) and increase wealth inequality.

Sileni 8y ago
But you're ignoring the fact that people are already being priced out of the housing market. The market only continues to gain steam while the next generation can reasonably shoulder the burden being placed on them by the previous. Otherwise those assets are going to deprecate. Credit allowed a handful of people to become incredibly wealthy by becoming rent seekers, while most people didn't realize they had the opportunity. The general consensus seems to be "Tough shit if you weren't born in the 60's - 70's". I don't see that ending well for the economy as a whole.
- mrec 8y ago
  Yes. Here in the UK, I have a lot of sympathy with the view that Corbyn's Labour would deliver debt-funded jam today by dumping the burden onto future taxpayers, but the Conservatives have been doing the exact same thing for their own clients, via property inflation.
  - mendelsd 8y ago
    "Land by its nature is scarce. A site in Mayfair cannot be reproduced like a pair of shoes. The monopoly rent it commands plays no productive role. It acts as a private tax on the productive economy. The question has always been what can be done about it." [1] I posted that quote because it's the reference I found most speedily to the idea that high land prices impose private (i.e. paid into the private sector) taxation, rather than public. You didn't make the distinction between public vs private taxation in your comment and I thought it should be made. Public taxation is also involved of course, e.g. when governments need to bail out the banking system; Help to Buy in the UK; etc. [1] https://blog.p2pfoundation.net/how-land-property-is-tied-to-inequality-the-uk-example/2014/10/24 https://blog.p2pfoundation.net/how-land-property-is-tied-to-...
    - mrec 8y ago
      > high land prices impose private (i.e. paid into the private sector) taxation, rather than public Agreed, though I'm not sure that's much consolation to the ones paying it. With public taxation at least you can hope you're helping to fund something useful.