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Maybe I'm misunderstanding the quote, but home prices aren't going up because of an "increase in the quantity of useful labour employed within it". These are j

Maybe I'm misunderstanding the quote, but home prices aren't going up because of an "increase in the quantity of useful labour employed within it". These are just dumb city planning decisions: Hey, I'm going to permit an increasing number of offices in this downtown and not allow denser housing. Drive until you qualify, millennials.

oceanghost 7y ago
Forgive me for being obtuse. You said: > As housing prices and commute times go up so does the price of everything that involves human labor. Which in my estimation was a restatement of the Adam Smith quote. You approached the issue from a different direction... but it all works out in the end. Housing prices cannot increase without the capital to drive them up. I was merely agreeing with you in quote format.
- dredmorbius 7y ago
  Different mechanisms. The Smith quote is a demand-side dynamic: increased wealth > increased activity > increased demand. Sprawl is a supply-side dynamic, increasing the minimum viable cost floor: greater sprawl, greater frictions, transport and commute delays, congestion and travel costs. For a given unit of labour you're incurring a greater overhead in (dead) travel time. Efficiency is decreasing, but labour demands its minimum viable wage.
momokoko 7y ago
Can you then explain why many cities where the population is declining in the US are seeing housing prices go up? For example Buffalo, Pittsburgh and Cleveland?
- dsfyu404ed 7y ago
  Are they going up substantially more than inflation over the same time period? Housing stock tends to shrink with population since in a renters market there's less incentive for landlords to keep properties in rent-able condition. For example, an apartment remodel that might have been sub'd out for $10k and done in a month instead takes $5k and is done over the course of a year. When some % of all landlords start doing this to some % of properties it takes a chunk out of available supply and rents stay the same-ish.
  - deleted 7y ago
    [deleted]
  - momokoko 7y ago
    > Are they going up substantially more than inflation over the same time period? Yes, considerably more.
- jdhn 7y ago
  1. People want to move back to the city. I live near Detroit and you can't go a week without hearing as to how people are moving back into the city, and subsequently driving up housing prices. 2. The Federal Reserve's quantitative easing has artificially pushed down interest rates, which has predictably led to an increase in housing prices.
- cheriot 7y ago
  I've only paid attention to local markets in DC and the Bay Area. If you know of any good write ups on other markets I'm curious to see what's going on.

oceanghost 7y ago

Forgive me for being obtuse. You said: > As housing prices and commute times go up so does the price of everything that involves human labor. Which in my estimation was a restatement of the Adam Smith quote. You approached the issue from a different direction... but it all works out in the end. Housing prices cannot increase without the capital to drive them up. I was merely agreeing with you in quote format.

dredmorbius 7y ago
Different mechanisms. The Smith quote is a demand-side dynamic: increased wealth > increased activity > increased demand. Sprawl is a supply-side dynamic, increasing the minimum viable cost floor: greater sprawl, greater frictions, transport and commute delays, congestion and travel costs. For a given unit of labour you're incurring a greater overhead in (dead) travel time. Efficiency is decreasing, but labour demands its minimum viable wage.

momokoko 7y ago

Can you then explain why many cities where the population is declining in the US are seeing housing prices go up? For example Buffalo, Pittsburgh and Cleveland?

dsfyu404ed 7y ago
Are they going up substantially more than inflation over the same time period? Housing stock tends to shrink with population since in a renters market there's less incentive for landlords to keep properties in rent-able condition. For example, an apartment remodel that might have been sub'd out for $10k and done in a month instead takes $5k and is done over the course of a year. When some % of all landlords start doing this to some % of properties it takes a chunk out of available supply and rents stay the same-ish.
- deleted 7y ago
  [deleted]
- momokoko 7y ago
  > Are they going up substantially more than inflation over the same time period? Yes, considerably more.
jdhn 7y ago
1. People want to move back to the city. I live near Detroit and you can't go a week without hearing as to how people are moving back into the city, and subsequently driving up housing prices. 2. The Federal Reserve's quantitative easing has artificially pushed down interest rates, which has predictably led to an increase in housing prices.
cheriot 7y ago
I've only paid attention to local markets in DC and the Bay Area. If you know of any good write ups on other markets I'm curious to see what's going on.