The Fed's sense of urgency with respect to inflation--which is what happens when Congress floods markets with cash and there's too much money chasing too few goods--has been grossly disappointing. Pull that lever all you want. Doesn't mean the Fed is going to grow a sack. Under Reagan we saw the prime close in on 20% in an effort to stave off inflation. I'm just being a realist. Every move the Fed makes is politically charged and has the potential to damage the incumbent. Right now Biden is all they've got, as unlikely and frankly scary as that sounds. Which leads us back to--you guessed it--election reform. How else to keep bad candidates like Trump and Biden off ballots?
There are two conflicting schools of thought on zoning and development. The "growth machine," which is what most Norwalk homeowners believe they are subject to--a tendency towards maximization of land values facilitated by cozy relationships between elected officials & their land use appointees and large-scale developers; and the "homevoter" hypothesis, postied by economist William Fischel, professor emeritus at Dartmouth, which posits that NIMBY homeowners, also worried about maximizing their investments, are responsible for underdevelopment. Westport, where I resided for 26 years, where I raised and educated my children, falls into the Fischel camp. Norwalk is part of the "growth machine" camp. BOTH assume that real estate is an investment which generally appreciates over time. In Fischel's "The Homevoter Hypothesis" (which became a handy guide for me in 2003 when I was marshaling support for the Staples High School renovation project and was facing strong opposition from neighbors), he suggests the creation of a type of insurance against devaluation of real estate as a result of perceived LULUs. The idea never took off. But I appreciated what Fischel was trying to accomplish, an idea derived from his experience as a zoning commissioner in Darthmouth, NH. One of the reasons I turn to Fischel on zoning matters is that he is not only an economist but a zoning commissioner with real life experience dealing with NIMBY opposition to development.
With respect to your suggestion that we--developers, single-family homeowners, real estate investors, what have you--need to shift our wealth away from reliance on land value, I'm afraid that's tantamount to getting 300 million US gunsowners to surrender their weapons because someone else thinks it's a good idea. Going back to Fischel, the average American's nest egg IS tied up in home equity. How do we get that genie back into the bottle? In my opinion, once homeownership isn't worth as much as it's worth today, people--maybe even you--may come around to prefer renting. In other words, some if not most of the appeal of homeownership is the investment value.
This is a great piece. I think there are some interesting hybrid arrangements too, like the jeonse (key money) system in South Korea.
So true
The Fed's sense of urgency with respect to inflation--which is what happens when Congress floods markets with cash and there's too much money chasing too few goods--has been grossly disappointing. Pull that lever all you want. Doesn't mean the Fed is going to grow a sack. Under Reagan we saw the prime close in on 20% in an effort to stave off inflation. I'm just being a realist. Every move the Fed makes is politically charged and has the potential to damage the incumbent. Right now Biden is all they've got, as unlikely and frankly scary as that sounds. Which leads us back to--you guessed it--election reform. How else to keep bad candidates like Trump and Biden off ballots?
There are two conflicting schools of thought on zoning and development. The "growth machine," which is what most Norwalk homeowners believe they are subject to--a tendency towards maximization of land values facilitated by cozy relationships between elected officials & their land use appointees and large-scale developers; and the "homevoter" hypothesis, postied by economist William Fischel, professor emeritus at Dartmouth, which posits that NIMBY homeowners, also worried about maximizing their investments, are responsible for underdevelopment. Westport, where I resided for 26 years, where I raised and educated my children, falls into the Fischel camp. Norwalk is part of the "growth machine" camp. BOTH assume that real estate is an investment which generally appreciates over time. In Fischel's "The Homevoter Hypothesis" (which became a handy guide for me in 2003 when I was marshaling support for the Staples High School renovation project and was facing strong opposition from neighbors), he suggests the creation of a type of insurance against devaluation of real estate as a result of perceived LULUs. The idea never took off. But I appreciated what Fischel was trying to accomplish, an idea derived from his experience as a zoning commissioner in Darthmouth, NH. One of the reasons I turn to Fischel on zoning matters is that he is not only an economist but a zoning commissioner with real life experience dealing with NIMBY opposition to development.
With respect to your suggestion that we--developers, single-family homeowners, real estate investors, what have you--need to shift our wealth away from reliance on land value, I'm afraid that's tantamount to getting 300 million US gunsowners to surrender their weapons because someone else thinks it's a good idea. Going back to Fischel, the average American's nest egg IS tied up in home equity. How do we get that genie back into the bottle? In my opinion, once homeownership isn't worth as much as it's worth today, people--maybe even you--may come around to prefer renting. In other words, some if not most of the appeal of homeownership is the investment value.