On financialization, cap rates, market frictions, whether there's a crisis, supply constraints, YIMBYism, spatial misallocations, and human capital densification
This is a good overview. I think the inter city heterogeneity is important and also mmmmm not solvable. In the only market I care about (my own) you see big fights about rezoning apartment districts to high rise and ag to urban that create the impression we’re at capacity, but we actually have room for around 200k units in a mix of apartment, duplex, and single family homes, and a very straightforward process to get highrise zoning in exchange for some affordable housing in the urban core that comes with low interest loans. It’s just….developers don’t want to build there and that. Maybe for good reason idk, maybe just cause ag land is cheap and land costs are huge here.
LMW do not directly test income-stratified sorting/migration, so their “total income growth” regressor can still be consistent with a compositional story where constrained places get richer because lower earners leave or never arrive.
It seems to me that home ownership as “wealth-building”, as opposed to simply having a place to live, may be a detriment to the economy and a source of unproductive and unjustified inequality.
The house (or, more accurately, the land under the house) that my wife and I purchased many years ago has insanely appreciated. Great for us! But has anyone else benefited?
A similar gain in the stock market would, at least in theory, have been our reward for providing investment capital to create new products, services and jobs. But land value is a zero sum game. My gain is at the expense of someone else who is struggling to pay the rent or the mortgage.
Yes, land values are important signals for the market allocation of land, preferrable to the inherently limited efficacy of central planning. I think the answer lies in “Georgist” thought, the implementation of a Land Value Tax, preferably as a replacement for income and sales taxes.
Great unpack on the income inelasticity piece, especially how Schwabe's Law gets overlooked in most affordability debates. The 0.67 elasticity means RTI ratios arent just stable, they're designed to mislead when used as crisis metrics. I've noticed how that Baum-Snow-Han finding about intra-city variation (0.2 to 0.9 across tracts) really nails why metro-level deregulation wins feel hollow even when they pass.
This is a good overview. I think the inter city heterogeneity is important and also mmmmm not solvable. In the only market I care about (my own) you see big fights about rezoning apartment districts to high rise and ag to urban that create the impression we’re at capacity, but we actually have room for around 200k units in a mix of apartment, duplex, and single family homes, and a very straightforward process to get highrise zoning in exchange for some affordable housing in the urban core that comes with low interest loans. It’s just….developers don’t want to build there and that. Maybe for good reason idk, maybe just cause ag land is cheap and land costs are huge here.
LMW do not directly test income-stratified sorting/migration, so their “total income growth” regressor can still be consistent with a compositional story where constrained places get richer because lower earners leave or never arrive.
It seems to me that home ownership as “wealth-building”, as opposed to simply having a place to live, may be a detriment to the economy and a source of unproductive and unjustified inequality.
The house (or, more accurately, the land under the house) that my wife and I purchased many years ago has insanely appreciated. Great for us! But has anyone else benefited?
A similar gain in the stock market would, at least in theory, have been our reward for providing investment capital to create new products, services and jobs. But land value is a zero sum game. My gain is at the expense of someone else who is struggling to pay the rent or the mortgage.
Yes, land values are important signals for the market allocation of land, preferrable to the inherently limited efficacy of central planning. I think the answer lies in “Georgist” thought, the implementation of a Land Value Tax, preferably as a replacement for income and sales taxes.
Great unpack on the income inelasticity piece, especially how Schwabe's Law gets overlooked in most affordability debates. The 0.67 elasticity means RTI ratios arent just stable, they're designed to mislead when used as crisis metrics. I've noticed how that Baum-Snow-Han finding about intra-city variation (0.2 to 0.9 across tracts) really nails why metro-level deregulation wins feel hollow even when they pass.