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The Housing Theory of Everything


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2021 Sep 16, 5:32pm   318 views  6 comments

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Good read. While I wouldn't want to live in NYC of 40 million ppl, such a city would cause wages to rise in Red America as ppl moved to a more housing affordable NYC, thus raising wages for those left behind.

https://www.worksinprogress.co/issue/the-housing-theory-of-everything/

The rest of it has some things I either could care less about or I don't agree with. But the good parts make it a worthwhile read.

This in particular: https://policyexchange.org.uk/publication/strong-suburbs/

Comments 1 - 6 of 6        Search these comments

1   Patrick   2021 Sep 16, 5:38pm  

Looks like we're kind of screwed by interest rates.

If rates go up, then the "value" of all that expensive housing has to go down.

And while people think they have money in the bank, they do not. The bank merely has a debt to them, and in turn is owed money by people who borrowed to buy that expensive housing. When rates go up and that housing goes down, all those banks will be bankrupt, and the "money" you thought you had in the bank will turn out not to be there.

Ah, but the Fed can print us out of this, you might be thinking. Well, they can print and buy mortgages, but inflation is already surging, and it will just surge even more.

So your money in the bank will be eaten away one way or another.
2   GreaterNYCDude   2021 Sep 16, 7:59pm  

Patrick says
If rates go up, then the "value" of all that expensive housing has to go down.


Logic would indicate this, but as you well know logic rarely applies to the housing market. Studies have shown that prices go UP with rising interest rates... to a point. It's the whole "buy now or get priced out forever" falicy. Aa rates starts to rise people on the fence jump in, often extending themselves to do so.

We all remember how this ended in '08. That may still well happen, but NINJA loans are not as prevalent, credit standards have increased (somewhat) so defaults should be fewer. I think the day of reckoning for housing bubble 2.0 that we are in is at least 5 years out, if not a decade from now.

Frankly I think that since inflation is already here, at some point soon we'll see rising wages for the middle class.. This will help keep the ever rising house prices continue their trajectory a while longer.

As far as the article in the OP. I disagree with almost all of it. Higher density housing is NOT a good thing. One of the great things about this country is the amount of land we have and our ability to spread out and not live on top one one another. Densely packed cities lead to squalor, propagation of infectious diseases and misery. That leads to crime, poverty and urban blight.

If nothing the covid lockdowns have proved that for many white collar job holders the only thing one needs to work is a reliable internet connection. Gives one the freedom to get as far away from the city as possible.

40 million in NYC? The infrastructure wouldn't be able to support it without some major upgrades. As it is they rely on upstate resources for clean water and reliable electricity.
3   RWSGFY   2021 Sep 16, 8:14pm  

Any article mentioning "climate change" as a thing is not worth reading, imo.
4   just_passing_through   2021 Sep 16, 8:31pm  

GreaterNYCDude says
That may still well happen, but NINJA loans are not as prevalent, credit standards have increased (somewhat) so defaults should be fewer. I think the day of reckoning for housing bubble 2.0 that we are in is at least 5 years out, if not a decade from now.


Orgs like BlackRock will just get free money from the Fed and buy up the housing stock this time.
5   Reality   2021 Sep 16, 9:37pm  

HunterTits says
While I wouldn't want to live in NYC of 40 million ppl, such a city would cause wages to rise in Red America as ppl moved to a more housing affordable NYC, thus raising wages for those left behind.


IMHO, the author of that article may have fallen into a econometric / statistical trap: big cities may indeed have higher nominal wages, but the purchasing power of the wages (in the local area) may actually be lower so his argument that big cities have higher productivity may not be valid at all. This reality should be quite intuitively obvious: the higher housing density and public transportation enable the young and new immigrants to live in the city, and those among them achieving some degree of success in a decade or two (i.e. being able to prove higher productivity) tend to move out to the suburbs.

IMO, the short-term prosperity of a growing city is somewhat of a pyramid scheme: when a city grows from 10mil to 20mil in 20-30 years, all the additional bureaucrats hired in those years are essentially first-generation bureaucrats. The city is only paying their current wages, and their retirement is severely under-funded and what is funded is reinvested into the city anyway. When they retire after those 20-30 years and if the city pop stays at 20mil for the next 20-30 years, the city would have to pay not only a new generation of bureaucrats but also the retired bureaucrats! At that point, we will see a stagnant city and urban blight. . . which incidentally also explains why they want all the bureaucrats take the clot shots. If only Bernie Madoff had thought of having all his clients take the clot shot!
6   Reality   2021 Sep 16, 9:41pm  

GreaterNYCDude says
Densely packed cities lead to squalor, propagation of infectious diseases and misery. That leads to crime, poverty and urban blight.


And shorter average life-span . . . which is the real goal that the progressives want.

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