Fixing the Housing Affordability Crisis. Ed Glaeser
No other issue has greater potential for common ground than America's housing affordability crisis. Progressives and conservatives alike agree that for far too many Americans there is a critical shortage of available homes.
Since COVID erupted in 2020 the costs of apartment rentals and homes to buy have soared. According to the real estate firm Zillow, average U.S. home prices doubled in the past decade. In recent months mortgage rates went up to levels not seen in nearly two decades. With the growing possibility of a recession in the near future, there is no shortage of pessimism in the housing market today.
We discuss solutions to the housing mess with Harvard University economist Ed Glaeser, author of "Rethinking Federal Housing Policy: How to Make Housing Plentiful and Affordable", "Survival of the City: Living and Thriving in an Age of Isolation" and many other books.
Among the topics raised: The role played by zoning and environmental regulations in limiting homebuilding, Long-standing local resistance to new housing, The potential for pre-fabricated building to sharply reduce the cost of construction, Why giant companies face far few hurdles to business growth than many small neighborhood firms, and recent moves by some urban politicians on the left to support plans by developers to build new homes, even if much of it is neither subsidized nor fully affordable.
"The whole COVID era has been a spectacular time for housing price increases," Glaeser tells us. The shortage of homes for sale is one reason. So is rising demand for additional space as millions more people work from home. Another cause is "the longer-term dysfunction of our housing markets in failing to produce enough supply."
Recommendation: Jim is reading "How The World Really Works" by Canadian professor Vaclav Smil, author of more than forty books on topics including energy, environmental and population change, food production and nutrition, technical innovation, and public policy.
A special thank you to The Manhattan Institute and Director of Marketing Aaron Ricks for help with producing and recording this episode.
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