This stat should probably be per population size, but regardless it’s a clear indicator that the economy isn’t as awesome as they say
We need to eliminate (most) zoning, bring in a bunch of immigrants, train them up on construction, and build moderate-density housing like crazy.
If you're living the suburban dream, there's nowhere to walk (it's all neighbours' lawns), no tram or metro is coming to pick you up, so you need a car to get anywhere. There's traffic on the way in, parking lots when you get there, and you can't even drink.
Low density is low traffic for the simple reason that low density means few people, few people means low traffic.
Too many cities and inner ring suburbs in the US are basically locked in amber and it's a real problem.
EDIT: Though I agree with the goal of "low traffic," and agree with the other commenters that low density areas in the US tend to not be low traffic. (At least not near cities - again, get far enough away from cities if you want low density and low traffic.) I suspect you won't like the ways a city might get there though.
Not that I'd simply delete your planning laws: I would copy the high-level stuff from Europe, and keep whatever your local rules are for fire, hurricane, earthquake, and tornado safety etc.
But the economy in general is not doing stellar, regardless. This bifurcation of wealth is going to lead, or is at least a marker, of an instability in the system. The fact that the Fed just decided that they’re looking at lowering interest rates means that they can’t lower inflation because the stock market and housing prices will crash. Housing prices increase because money printing increased.
Part of the problem is that the US isn’t one “the economy”, it’s localized, primarily due to housing markets. There is no way that the top 10% of income earners qualify as “upper class” in the US, because the majority are in high COL areas.
When you make $400k/pa, but pay $5k/mo in rent/housing, that’s a very different outcome than making $400k/pa and paying $1k/mo in rent/housing. Both of these situations exist in the US, but the former is much more common than the latter. Looking at income only without accounting for cost of living presents a skewed view of things. The person paying the higher cost of living in this situation is solidly middle class, if and only if they own that property, renters by definition aren’t middle class. The person paying the low cost of living almost certainly owns the property and is able to invest heavily, so is almost certainly upper class or a HENRY.
Earning $90k/pa puts you in the top 10% of income earners, and isn’t even six figures. The new middle class for non-Boomers starts in the top 3%. You only need to earn $300k/pa to be in the vaunted 1%, and in most high COL areas you’ll never be able to afford a house.
Looking at income percentiles without looking at cost of living is a really skewed viewpoint, and it ignores the huge wealth chasm between the top 0.1% and everyone else, even 1%ers struggle to make rent.
You’re only “qualified” for what you can make the down payment on, and starter homes in high CoL areas are nonexistent.
You seem to have rose colored glasses.
>You’re only “qualified” for what you can make the down payment on
You sound like you've never applied for a loan.
>You seem to have rose colored glasses.
You seem to consider only the housing you cannot afford "decent" and then complain as if it's the reality.
If you think something you can buy in SFBA under $1M is livable rather than “bulldoze ready”, you are the one that is out of touch.
It's been also doing great for the lower classes. The bottom quartiles have seen far higher wage growth than the top quartiles.
Or rather, unless you put them up in hotels and send them back when done, how do you account for providing them housing when housing is already constrained?
>> when housing is already constrained?
By removing those constraints. OP accounted for this.
It takes two years [1] to get a building permit, and the two-year borrowing rate for the U.S. Treasury is 4.44% [2]. That delay alone will cost a developer at least 10% more.
That permiting process, alone, raises housing costs by double digits [a].
[1] https://www.sfchronicle.com/sf/article/housing-permits-san-f...
[2] https://home.treasury.gov/resource-center/data-chart-center/...
[a] 1.0444 ^ (627/365) = 7.75%
My point is the housing being built isn't going to serve the those who are housing insecure or migrants working construction jobs. If anything these places are taking over the neighborhoods that used to serve that sector.
Why would any of this change developers' profit motive?
> the housing being built isn't going to serve the those who are housing insecure
We agree. This is because housing supply is constrained. That raises its price, which makes it unaffordable for more people. Removing supply constraints changes that.
Also, new luxury housing absolutely lowers housing prices. I've seen it personally. A luxury building opened nearby. I figured there was a 10 to 15% difference after accounting for amenities like its gym, in exchange for more space and a quieter apartment. Others clearly did the math, because we lost two people in the building to it. I showed my math to the landlord, told them I was considering decamping, and negotiated down my rent. I told my neighbours and they each did the same. We had more choices, and so had to pay less. Basic supply and demand.
Developers have the same incentive, they are not incentivized to build properties they'll make less on, even if supply goes up. I've seen lots of properties built, they can be half unoccupied/empty and the rents/leases don't change. They're simply not going to lower the value of their own properties, they'll keep it inflated because at least then it’s a tax write-off/loss.
This increased supply concept is being parroted but no one can provide examples of supply being increased and rents going down, or the very least demand can't be kept up with and no area gets saturated to the point prices go down. Usually the opposite happens, new apartment/housing = nicer neighborhood = more desirable area = rent/housing values go up. We usually call this gentrification. Not unless it was a government subsidized project or section 8 housing or a local economic collapse and people leaving (which cheap rent means little if there are no jobs/economy).
Developers are very risk adverse, they’ll never build in an area that risks supply outstripping demand.
I don't understand how people can live for 20 years, see these patterns and still believe the theories they get taught in economics 101 in school and think they're fully educated on the matter.
Not only do we not see a decrease in house prices and rent prices when new housing is developed, but there’s literally a higher vacancy rate than the amount of housing we’re supposedly short on.
In particular, corporate landlords have figured out that it’s better for their bottom line to keep units vacant than to lower the rent, partly due to plausible deniable collusion via RealPage et al.
No, it’s because of loan covenants. Leveraged landlords can’t lower the rent without defaulting on loans. It works in the short term, and then the market either corrects or they default. (You see the same effect in CRE. And China.)
There have been cases of collusion. I can also cite company towns. These are scandals because they’re an exception; the housing crisis is one across continents.
Sometimes there are international conspiracies. More often, it’s emergent behaviour. Particularly in the landlord market, which features a lot of cottage industry, it’s a bit ridiculous to propose scandals as the universal solution. (Do you really know zero individual landlords?)
> they’ll never build in an area that risks supply outstripping demand
You’ve clearly never been to Phoenix. Or any other city that overbuilt on the back of zealous developers.
> no one can provide examples of supply being increased and rents going down
Literally did in an anecdote. Also Japan.
This has been deeply studied [1]. It’s difficult to find counter examples. Yet we continue to see the gentrification hypothesis parroted because most voters never got past high-school economics, nor learned to read academic papers.
> see these patterns and still believe the theories they get taught in economics 101
I mean, yes. Same here. That said, I’ll take the silver lining: I’m glad I’m a homeowner and can count on folks who think limiting supply will keep the gentrifiers out. (I’m still waiting for my price-fixing membership email.)
[1] https://www.aei.org/wp-content/uploads/2017/04/Overview-Talk...
The article’s chart makes the change look more dramatic by using the lowest level as zero bound instead of zero.
We've been doing this in France for decades, but in recent years it was done by French politicians on an extraordinary scale while they claimed to an international audience that they bring more rigor in spending.
I think you did the same on a bigger scale.
This is juicing the metrics. Not changing the metrics.
Juicing is real. Changing is mostly a conspiracy among the uneducated, at least in America.
Edit: Since I can't reply, if your measure doesn't account for unsustainable practices, then its not really a measure, or you're intentionally "changing" the measure to leave out accounting for unsustainable practices. Measuring growth in a fund when its all just a ponzi scheme isn't how we measure fund performance on a report. If this is done, its either intentional or incompetent. Either, is very bad when dictating policy.
This is obviously untrue. An owner of a timber forest may measure how many trees they cut down each year. If they double the rate at which they cut down trees, that doesn't mean the way trees are counted has changed. It means they're harvesting unsustainably.
> then its not really a measure, or you're intentionally "changing" the measure to leave out accounting for unsustainable practices.
No, it's the nature of measures. What gets measured gets managed. The measure is still useful, it's just being read without context.
The degree of unsustainability is widely discussed because there are other measures, also collected and disseminated and picked apart, that characterise it. If you're making personal, commercial or policy decisions based on the headline metric, you should learn more about how to read the metrics as a whole. That isn't a problem with the measures, it's one of education.
Pushing stats like average income being up is misleading and the stock market is inflated by reverse repos. The concentration of market cap in the index is problematic as well.
Reverse repos are still at shockingly high levels but drastically down from their recent highs. So the question is if there is another financial instrument at play that isn't as widely known since the repurchase agreements started taking heat.
Wealth inequality though is the real metric to look at and it's hard to judge but record homelessness is obviously not a good sign.
Not to my knowledge. Contingent employment has always counted as employment for broad measures; this is why many papers discuss non-farm payroll [1] or even full-time employed from surveys [2]. The problem is these data are less precise than broader payroll figures, and so can't be observed month to month nor even quarter to quarter, certainly not real time.
You're discussing an actual measurement problem, one that's been discussed since 2019 [3][4]. But it's cause for changing the metrics, not caused by any change in the metrics.
> the stock market is inflated by reverse repos
This is wrong, but I'm not sure for what reason. Could you explain why you think this?
Repos are a borrowing mechanism. Reverse repo means lending. Yes, lending boosted the stock market. But we're currently in a liquidity-draning environment, so this is a peculiar complaint.
[1] https://fred.stlouisfed.org/series/PAYEMS
[2] https://fred.stlouisfed.org/series/LNS12500000
[3] https://www.axios.com/2019/04/18/gig-economy-employment-econ...
Overnight repurchase agreements give banks seemingly off the books money to invest in commodity and equity markets. They are a direct driver of inflation. Banks are able to maintain positions and their balances by purchasing Treasury products at 11:59pm and having the fed buy them back at 12:01am. They are supposed to be used strictly for emergency liquidity situations but as you can see from the chart we got very far away from that. They are finally coming down but still very high. They are the primary reason for the record inflation.
- Drug usage increasing
- Depression/suicide increasing
- Life expectancy going down as a result of the above
- Homelessness increasing
- People are forced to take gig jobs, but this is somehow counted as fulltime employment.
- Taking people off the unemployment numbers because they haven't been able to find a job for 6 months or may have given up.
- College becoming unaffordable and leading to massive debt
- Housing becoming increasingly unaffordable, middle class households can no longer buy a home (technically to me means they're not really middle class)
I can go on.
Fudging the statistical measures by which we define economic slumps or saying its all cool cause Wall Street is recovering doesn't change what reality is for the average person. Things are getting worse for most people while getting better for smaller portion (wealth disparity increase).
>Fudging the statistical measures by which we define economic slumps or saying its all cool cause Wall Street is recovering doesn't change what reality is for the average person
But so far as I can tell indicators like GDP or unemployment were used for decades, and they haven't changed the methodology for those. Therefore I'm really sure what you mean by "fudging". However all the other indicators that you've listed are real and point to real issues, but aren't traditionally used in economic contexts. If anything changing the goalposts from gdp/unemployment to "Drug usage increasing" or whatever seems much closer to the "fudging" that you're decrying against.
If you think administrations don't fudge the numbers to make themselves look more successful I don't know where you've been. Statistics are easy to mess with, and administrations favor the models that make them look better. It doesn't matter whose in office. Places like WV have seen mass unemployment for decades, but the numbers look better because people have gone on checks or government assistance and given up, thus aren't counted.
It's very telling most of the people here live around economic centers and find it very easy to ignore what stark reality is in most areas of the country. It's easier to believe a fairy tale told by the government, and only be critical of it when the opposing party is in office, when supposedly nothing has changed.
They are counted, there are 6 different unemployment measures and the labor force participation rate, all easily available. So far all I see are nebulous/unfounded claims providing zero evidence.
No one is denying that a certain portion of the population might be worse off, or that volatility is higher for some populations. But the official statistics are not denying that either.
>Unemployment has changed, it used to mean people that want to work but can't find jobs.
It still means that.
>If you lose a full time job and work two part time jobs you're considered fully employed, even though you lost benefits and have to work crazy hours.
This is how full employment has been measured for a long time, so it's not an example of government changing measures to make things look better than they are.
>If you think administrations don't fudge the numbers to make themselves look more successful I don't know where you've been
This is not evidence. It's just a non sequitur.
>Statistics are easy to mess with, and administrations favor the models that make them look better.
Replacing the first conjecture with this one helps nothing. Again, where is the evidence for this statement? Is it a hunch that we're just meant to go along with?
>Places like WV have seen mass unemployment for decades, but the numbers look better because people have gone on checks or government assistance and given up, thus aren't counted.
This is how unemployment has been measured for more than half a century. It is not something that the government has changed to make things look better than they are.
>It's easier to believe a fairy tale told by the government, and only be critical of it when the opposing party is in office, when supposedly nothing has changed.
There is, again, zero evidence in this statement. It is looking more and more like the original assertion, "They've literally been changing the measurements of economic indicators to make things seem better than they are," was made up.