Great conversation Riley. We certainly need more of this long form discussion. Unfortunately long form discussion does seem to be a dying art. I would suggest that we could spend some time considering the question or even the problem that we are trying to address. As Charles Kettering put it "A problem well defines is a problem half solved". "Housing Crisis" is a headline to sell many and varied stories (some agencies are clearly using it as click bait) but it is not actually a tangible thing to be addressed. I believe that the benefits of this discussion and getting it right are far too valuable to be put off by the difficulty of questioning the existing beliefs or status quo.
I've really enjoyed the series Riley, hope you always find time to write the next article. What do you think about the fact that even if people with 'the greater good' in mind got together, the political will isn't there? Cameron Murray talks about this: https://www.fresheconomicthinking.com/p/why-politicians-must-pretend-to-want.
Love Cameron Murray - he’s much smarter than me haha.
Yes if you read my previous article “the housing crisis is here to stay” this is basically the whole premise. I go through each policy proposal and note how most of them are political suicide. This is why more sprawl is always the end result - because it’s the path of least resistance.
Unless the federal and state governments can find ways to get creative about taking housing policy out of the hands of local governments - unfortunately, things are going to need to get a lot worse before they get better.
Yes, take housing policy out of the hands of local governments. Anarchy would be better.
From an economist's point of view, the market for housing is set up in such a way that the first and most essential precondition for capitalism to function effectively, so that the consumer is sovereign, and his needs are met at the lowest cost, aesthetically, namely 'freedom of entry' is not attained. Zoning restraints ensure that most of the land is simply not available for use, it's that part called 'rural'. In the part that is zoned for development there is just one formula applied, subdivision to create freehold title. Once its zoned for use and carved up into millions of tiny parcels and capital is sunk, you can't easily unscramble that egg. Project builders manage to exploit subcontractors and organize themselves to secure economies of scale which is a plus in the sense that it tends to keep costs down. Even so, the result is only marginally affordable from the middle-income perspective, providing both partners bring in an income. Established developers are protected by their ability to navigate the complexities of the planning system and spread the cost quite thinly across a large number of lots but the little guy, where the new entrants must come from can't do that. So, between the planners, the big project builders and the few large-scale developers what we get is a cookie cutter solution that is increasingly dysfunctional from the consumer/community point of view. It's like packing sardines, but we are now packing them in plastic rather than in metal, and the oil is going rancid.
Allow rental of numerous residences on rural land, as in a caravan park. Allow the owners to experiment to better meet consumer needs. Exclude cars, create safe places for kids to play and adults to interact, form informal interpersonal bonds and promote an environment where people will naturally assist each other to better meet their needs. This is natural to humans, and a source of joy. A good caravan park can offer a lifestyle superior to that in our suburbs.
Freedom of entry and design flexibility are essential.
It would be a good idea to limit the growth of a city geographically and plan to add new centres for development. We criticize the Chinese for their 'ghost cities'. But did we criticize the pioneers of railroad development 100 years ago? China has a single, unified low voltage, direct-current based, very safe, power grid that is being extended into the remotest corners of the country, a massive fast rail and highway network and the Belt and Road initiative that is the latest iteration of the Marshall Plan that rebuilt Germany and Japan. I could go on, but perhaps at the risk of being de-platformed.
Great conversation Riley. We certainly need more of this long form discussion. Unfortunately long form discussion does seem to be a dying art. I would suggest that we could spend some time considering the question or even the problem that we are trying to address. As Charles Kettering put it "A problem well defines is a problem half solved". "Housing Crisis" is a headline to sell many and varied stories (some agencies are clearly using it as click bait) but it is not actually a tangible thing to be addressed. I believe that the benefits of this discussion and getting it right are far too valuable to be put off by the difficulty of questioning the existing beliefs or status quo.
I've really enjoyed the series Riley, hope you always find time to write the next article. What do you think about the fact that even if people with 'the greater good' in mind got together, the political will isn't there? Cameron Murray talks about this: https://www.fresheconomicthinking.com/p/why-politicians-must-pretend-to-want.
Would love to chat further!
Love Cameron Murray - he’s much smarter than me haha.
Yes if you read my previous article “the housing crisis is here to stay” this is basically the whole premise. I go through each policy proposal and note how most of them are political suicide. This is why more sprawl is always the end result - because it’s the path of least resistance.
Unless the federal and state governments can find ways to get creative about taking housing policy out of the hands of local governments - unfortunately, things are going to need to get a lot worse before they get better.
Yes, take housing policy out of the hands of local governments. Anarchy would be better.
From an economist's point of view, the market for housing is set up in such a way that the first and most essential precondition for capitalism to function effectively, so that the consumer is sovereign, and his needs are met at the lowest cost, aesthetically, namely 'freedom of entry' is not attained. Zoning restraints ensure that most of the land is simply not available for use, it's that part called 'rural'. In the part that is zoned for development there is just one formula applied, subdivision to create freehold title. Once its zoned for use and carved up into millions of tiny parcels and capital is sunk, you can't easily unscramble that egg. Project builders manage to exploit subcontractors and organize themselves to secure economies of scale which is a plus in the sense that it tends to keep costs down. Even so, the result is only marginally affordable from the middle-income perspective, providing both partners bring in an income. Established developers are protected by their ability to navigate the complexities of the planning system and spread the cost quite thinly across a large number of lots but the little guy, where the new entrants must come from can't do that. So, between the planners, the big project builders and the few large-scale developers what we get is a cookie cutter solution that is increasingly dysfunctional from the consumer/community point of view. It's like packing sardines, but we are now packing them in plastic rather than in metal, and the oil is going rancid.
Allow rental of numerous residences on rural land, as in a caravan park. Allow the owners to experiment to better meet consumer needs. Exclude cars, create safe places for kids to play and adults to interact, form informal interpersonal bonds and promote an environment where people will naturally assist each other to better meet their needs. This is natural to humans, and a source of joy. A good caravan park can offer a lifestyle superior to that in our suburbs.
Freedom of entry and design flexibility are essential.
It would be a good idea to limit the growth of a city geographically and plan to add new centres for development. We criticize the Chinese for their 'ghost cities'. But did we criticize the pioneers of railroad development 100 years ago? China has a single, unified low voltage, direct-current based, very safe, power grid that is being extended into the remotest corners of the country, a massive fast rail and highway network and the Belt and Road initiative that is the latest iteration of the Marshall Plan that rebuilt Germany and Japan. I could go on, but perhaps at the risk of being de-platformed.
Thanks for the reference to the Cameron Murray article it is indeed a great read.