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112 sats \ 2 replies \ @justin_shocknet 23 Aug \ parent \ on: "Housing prices are not high by any historical standard" - evoskuil econ
Thinking about this more because its an interesting problem, to say land is hardly the constraint also ignores how regulation fits into this equation...
You can get cheap, largely unregulated land, and put a mass-produced box on it and not impact anyone else. In that context, regulation is not a factor in prices any more than it is in anything else that consumes energy to make.
But, people looking for housing generally don't want to put their mass-produced pods in the middle of nowhere New Mexico.
There's a network-effect element to housing which is why regulation is largely a local thing as land-use is just one part of the equation. If you added a million more pods stacked on top of each other in an existing city (network) you have additional burden on things like roads, sewer, water, electricity and so on... and most importantly, on the job market which effects the ratio of wages to housing costs. Housing costs would go down in that scenario in that city but presumably so would wages.
So, when buying housing in an existing network (city as opposed to a desert) you're consenting to a covenant, with regulation being the spam filters.
Through that lens, it's not the price of housing that is high in cities, but the price of using the network in a marketplace of free association. Every city is a citadel, poorly governed as they may be.
It's not the price of housing that is high in cities, but the price of using the network in a marketplace of free association.
I think it is possible to make the argument that the value of such networks has increased over time (you can make more money/have a better quality of life living in a city now than you could 30 or 60 years ago).
How would such an argument explain the generally higher housing price in all counties in the West (even those that are rural)? I suppose the network in such cases might be the state as a whole, but I wonder what network effect I get by living in the middle of nowhere Olympic Peninsula that I don't get living in middle of nowhere Iowa.
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Indeed, and I think this also ties in to what I was saying about fewer workers needed to work the same acreage in rural areas, the inverse would be true of the relative demand for knowledge workers increasing the value of cities. Aging population is a factor as well, older people are less capable of maintaining real property and need to be closer to healthcare resources that scale in population centers.
I'd think the disparity in the west coast vs. the mid-west is a combination of factors, there's still economic network effects in Oregon because you're in relative commuting distance to major economic hubs in California and Washington... as opposed to Iowa you're even further away from 3rd rate mid-west cities that aren't even a red fleck on that map in their own right.
Also if you have the the money to choose, would you rather live in the tundra of Iowa, surrounded by flat monoculture and truck stops, or have mild winters (lower heating bills) surrounded tall pines, mountains and coast, of Oregon? That gets back to some land being hard money and other land being a commodity, the network effects of either compound on themselves.
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