The entire focus in this essay seems to be on “how do we encourage local communities to allow more construction”, with an initial focus on the middle-class (?) hypocrisy of people who in theory want more housing built, but in practice don’t want it built in their neighborhood.
My intuition says that this is only engaging with one sliver of the overall situation. Or it’s looking at it from a highly specific perspective. The “players” in this game also include all the renters who have no savings and who aren’t thinking about home ownership, but just how to avoid ending up homeless; and the governments (I am thinking of Australia and Canada too, which are the cases of personal interest to me) who are favoring a net immigration of hundreds of thousands per year, for a mix of economic and political reasons. (And I’m absolutely not claiming that completes the picture—that’s just what comes to my mind.)
There’s also a technocratic attitude expressed here, according to which, if people have preferences that are inconvenient for the agenda, the first line of thought is, how do we change what they want? I’m referring specifically to the part about people having “a genuine incentive to keep their neighbourhood how it is”. Rather than respect that, or look into what people want to preserve, the philosophy is, how can we splash around enough money, to make the extra construction happen.
I also have my doubts about the value of these assurances that more homes means more GDP. For one thing, in recent decades, the fruits of GDP growth seem to have eluded whole layers of western society… I also find myself to be skeptical about a lot of the modern economic philosophy of growth: the extent to which it seems to be based on a simplistic feedback loop between housing and population that neglects finitude of land, quality of life, and other issues; economic analysis that treats people as interchangeable, and the value of goods as somehow homogeneous… I know there are economic concepts like elasticity, imperfect substitution, and externalities, which sound like they have the potential to represent these complications, but I’m not convinced that mainstream economic pundits actually take them into account.
If I ask myself, what is the appropriate way to think about housing shortages, what kind of problem is this—i guess it is a problem in the governance of markets, and in this case, it’s a “market” which for many of its participants, cuts to the quick. Again, I’m thinking about that difference between people who aspire to own their place of residence, and people for whom the issue is just, having a place to live, and keeping their head above water… My own lived experience is purely in the latter category. But I also perceive that in our current society, increasing home ownership means, having more people take out multi-decade home loans; and wasn’t there a global financial crisis 15 years ago, when that form of debt, coupled to borrowing at corporate and government levels too, almost became unsustainable?
In the end, because of where I am in the economic pyramid, and because of the short-term outlook arising from AI timelines, I have a survivalist attitude to these issues. I have no sway over the policy makers, and I have no time to arrive at an informed opinion about the right way to govern, what should be done in present conditions, or even just how the whole system really works. So, I only have doubts and questions to contribute.
I think you’re right, in a way? On the one hand, it had never seemed to me that there was some sort of deranged focus on building more for the sake of it. It’s more like “where I live, five years ago prices were €10k per square meter, now it’s more like 15k, and while my parents built wealth by buying their home, I’d literally need to spend the price of a brand-new car to buy just the toilets with no home attached”. In that sense, we need to build more. Or to convince all the people holding €15k/sqm homes to just pretend their homes are now only worth half as much. The latter is, of course, a far better option, and I think that’s more or less the idea behind your comment? But, as you know full well, if I ask my dad to pretend his home is worth only half of what he’s paying it for with his mortgage, or if I ask my uncle to pretend the money for his retirement is only half what he thought it was, they’ll say no! Building more isn’t great, because prices will remain high-ish at best, and because it can make our cities noticeably less livable unless it’s very well done (and certainly, make our cities quite different from what they now are). But I can’t think of any other way of doing it?
The entire focus in this essay seems to be on “how do we encourage local communities to allow more construction”, with an initial focus on the middle-class (?) hypocrisy of people who in theory want more housing built, but in practice don’t want it built in their neighborhood.
My intuition says that this is only engaging with one sliver of the overall situation. Or it’s looking at it from a highly specific perspective. The “players” in this game also include all the renters who have no savings and who aren’t thinking about home ownership, but just how to avoid ending up homeless; and the governments (I am thinking of Australia and Canada too, which are the cases of personal interest to me) who are favoring a net immigration of hundreds of thousands per year, for a mix of economic and political reasons. (And I’m absolutely not claiming that completes the picture—that’s just what comes to my mind.)
There’s also a technocratic attitude expressed here, according to which, if people have preferences that are inconvenient for the agenda, the first line of thought is, how do we change what they want? I’m referring specifically to the part about people having “a genuine incentive to keep their neighbourhood how it is”. Rather than respect that, or look into what people want to preserve, the philosophy is, how can we splash around enough money, to make the extra construction happen.
I also have my doubts about the value of these assurances that more homes means more GDP. For one thing, in recent decades, the fruits of GDP growth seem to have eluded whole layers of western society… I also find myself to be skeptical about a lot of the modern economic philosophy of growth: the extent to which it seems to be based on a simplistic feedback loop between housing and population that neglects finitude of land, quality of life, and other issues; economic analysis that treats people as interchangeable, and the value of goods as somehow homogeneous… I know there are economic concepts like elasticity, imperfect substitution, and externalities, which sound like they have the potential to represent these complications, but I’m not convinced that mainstream economic pundits actually take them into account.
If I ask myself, what is the appropriate way to think about housing shortages, what kind of problem is this—i guess it is a problem in the governance of markets, and in this case, it’s a “market” which for many of its participants, cuts to the quick. Again, I’m thinking about that difference between people who aspire to own their place of residence, and people for whom the issue is just, having a place to live, and keeping their head above water… My own lived experience is purely in the latter category. But I also perceive that in our current society, increasing home ownership means, having more people take out multi-decade home loans; and wasn’t there a global financial crisis 15 years ago, when that form of debt, coupled to borrowing at corporate and government levels too, almost became unsustainable?
In the end, because of where I am in the economic pyramid, and because of the short-term outlook arising from AI timelines, I have a survivalist attitude to these issues. I have no sway over the policy makers, and I have no time to arrive at an informed opinion about the right way to govern, what should be done in present conditions, or even just how the whole system really works. So, I only have doubts and questions to contribute.
I think you’re right, in a way? On the one hand, it had never seemed to me that there was some sort of deranged focus on building more for the sake of it. It’s more like “where I live, five years ago prices were €10k per square meter, now it’s more like 15k, and while my parents built wealth by buying their home, I’d literally need to spend the price of a brand-new car to buy just the toilets with no home attached”. In that sense, we need to build more. Or to convince all the people holding €15k/sqm homes to just pretend their homes are now only worth half as much. The latter is, of course, a far better option, and I think that’s more or less the idea behind your comment? But, as you know full well, if I ask my dad to pretend his home is worth only half of what he’s paying it for with his mortgage, or if I ask my uncle to pretend the money for his retirement is only half what he thought it was, they’ll say no! Building more isn’t great, because prices will remain high-ish at best, and because it can make our cities noticeably less livable unless it’s very well done (and certainly, make our cities quite different from what they now are). But I can’t think of any other way of doing it?