Ilana Redstone on Transparency in Higher Ed; Kevin Erdmann on housing supply; Bennett Zippel and Zach Rausch on online games and kids; Michael Strong on the humanities
Erdmann is correct about a shortage, but wrong about what's in short supply. It's not houses--we've got plenty of shelter--the shortage is of nice places to live. "Urbanize the suburbs" is an exactly wrong solution to the problem.
The rent and price appreciation has been systematically higher in the least nice neighborhoods. This is one of the key clues about what is happening. The trends in cost have been negatively correlated with amenities, neighborhood incomes, etc.
There is a bit of circular reasoning that I see frequently.
"It's the nice places that are getting expensive. The problem is that the cheap places aren't nice."
"How do you know if a place is nice?"
"I can tell it's nice because people are willing to spend a lot to live there."
How would you confirm if a place was nice and cheap?
I doubt anything would stay "nice and cheap" for long--unless there were lots of places that were equally nice. It would be like having a restaurant that was good, cheap, and never too-crowded, except where people are willing to spend 30% of their incomes on precisely that kind of restaurant. It doesn't happen.
I think the circularity runs the other way. There's a shortage in all the in-demand places, which I can tell, because prices have gotten so high. Well, why isn't there a shortage in the places people don't want to move to . . . Detroit? New Orleans?
Mostly, I think you need a theory of what drives home values. Perhaps that's what you're getting at by looking for a definition of "nice," and I definitely agree that it's not a one-size-fits-all answer (which is partly why I bristle at a one-size-fits-all diagnosis, like "shortage." In some contexts, exclusivity and the relative lack of density is what makes it so attractive, e.g. Park Slope v. Manhattan, or Westchester, etc. People will also pay a lot of money to have rich neighbors--that it's unaffordable is just selection effects at-work. That's not always true, of course--sometimes demand is just basic agglomeration effects, e.g. if you're a young grad on your first finance job, or whatever, you want to be where the action is--you don't care about a yard or trust, and you love density.
You're arguing from a false premise that doesn't match the facts at all.
During the Great Recession, home construction permanently declined by about 70% in Detroit. Since then, Detroit has accumulated about 20% of excess rent inflation. But, it isn't the nicest neighborhoods where rents have risen. Rents have risen more like 40% or 50% in the worst neighborhoods.
What are net population changes for higher income households? Or did the "nice" neighborhoods start building a lot of multifamily, while the less nice neighborhoods dabbled in NIMBYism? I think you're making my point perfectly--understanding demand is far more important than just counting the number of rooves and rooms.
While I’m not an expert on housing, it seems to me you two are talking past each other in large part by failing to separate (at least) two different things:
1) there is no doubt that NIMBY-based constriction of supply in the most desired cities has driven up prices significantly.
2) there is little doubt that rents everywhere have gone up relative to many other things consumers spend on as real interest rates (and nominal longer term rates) have gone up in the last several years.
I’d argue that it was ZIRP and QE that kept housing (rents) artificially cheap for a long time after the Great Recession.
If Kevin has data that demonstrates my 2nd claim is wrong, I would love to see it.
the opposite. zirp and qe drive home values up the same way free money drives the value of all assets up. when zirp ended, home values started to fall, so everyone (other than builders) stopped selling. just look at commercial real estate, where owners do not benefit from a 30 year mortgage and therefore do not have the option of "not selling." Property values have come down substantially. If home mortgages were floating rate, home values would be down ~15-20%.
Absolute vs % is important. 5 % of Boston median is $50k, 10% of 200k, twice as much rate, is only $20k.
It’s good for a family, married parents with kids, to be in single family houses. Not enough are being built. Especially in Boston & Silicon Valley & high priced nice areas. Because of zoning & limited land in those nice areas.
Few buyers of million $ homes are first time buyers, but the buyers sell their $900k home. To a new buyer who has sold, or is selling, their $800k home, to one who had a $700k to one who had $600k to one who had $500k, 400, 300, 200 who sold their $150k place to a first time buyer.
The USA should be building more houses. Those married couples who own 3 or more houses should not get any loan deductibility.
Total house payments should be flat 30% tax credit, up to half the median annual pre-tax income, so about 62/2 = $31,000 in loan payment, $9,300/tax credit max per year. 2024 taxes calculated with median from 2023.
Single family home ownership is a major reason America has been great, including huge amounts of DIY house repair and learning the self reliance & responsibility of being a home owner. Far far better than govt support for folks going to college, even if it was good college.
“The rent and price appreciation has been systematically higher in the least nice neighborhoods.”
Is this a decades long trend, or only since a few years after the Great Recession? Have you adjusted for real interest rates / long nominal rates and how they affect the price of rental property?
Everyone does have to live somewhere; they don’t, of course have to live in the more expensive areas.
Effectively all of the increase in American aggregate real estate value has been from regressive rent inflation from families moving down into worse housing because of the shortage. Wherever you see elevated housing costs in American markets, it dependably has been related to families trading down into the existing stock of homes because new homes were obstructed or migrating to cheaper cities at such a high rate that those cities get temporarily overwhelmed.
Shortage bros go first; 2. It’s not obvious we have a shortage anyway, except perhaps in a few cities; 3. the solution of “build more” would make the problem worse, not better, if it meant urbanize the burbs (which it often does); 4. it reflects an impoverished understanding of what drives home values (where lack of density is often a feature, not a bug)
I'm not pretending to be anything. I think ex-urban land use regs, especially around density, are probably one of the few species of regs that are actually justified. I also think most YIMBYs aren't really YIMBY, in that zoning appears to be the only kind of reg they don't like wrt to housing or otherwise. The very selective application of Hayek makes me suspicious that other game is afoot, e.g. centralizing zoning authority (rather than eliminating it), which is a rather audacious move for urbanites to make, as a response to their own flight from their own dysfunctional urban governance. Mostly, the 'Build More Housing' takes run roughshod over an actual understanding of what drives home values and/or demand, which is, after all, heterogenous across place and time. Plus, real estate is a pretty "efficient" market on the supply side--very competitive, and well-capitalized. The reality is that zoning is just not the prime mover in the "affordability crisis" and it's not even close--demographics, interest rates, and incomes are far more relevant--and I suspect that most efforts to target zoning would result in net-harmful changes.
Well, whatever else you may be correct about (I suspect some, but far less than half), your repeated claims about what drives home value are to me what demonstrate either disingenuousness or cluelessness (I suspect the former, as you seem too well-informed and reasonably intelligent for the latter to be likely).
YIMBYs are distinctly not about optimizing for home values. They are optimizing for having more housing in areas that people want to live in, and openly DO want to reduce the cost of housing, not “optimize” the value (i.e. maximize the purchase price) of housing.
It is NIMBYs who seek to reduce the supply of housing - for multiple reasons, but the obviously biggest one is to maximize the value of their own houses.
I won’t bother engaging on the rest. I do appreciate the reply though. Have a great day.
P.S. While I lean very strongly YIMBY myself, I agree with you that in the suburbs some amount of land use regulation is indeed wholly appropriate. But especially in places like CA with extremely high housing prices and limited supply, those regulations have gone too far. And the fact that the very leftist, regulate everything in sight, supported by wealthy upper middle class homeowners Governor Newsom agrees with me is strong evidence for my POV.
The point is only that people--yimbys too--often want to live in places *without many houses* (and therefore putting more houses there will make those places very much unlike the place they wanted to live). The unaffordability reflects the scarcity of nice, well-located suburbs, and not houses in those suburbs.
The claim that we have plenty of houses seems to be demonstrated by the narrow range long term in which the home ownership rate, that is "the proportion of households that is owner-occupied" fluctuates. Over the last 60 years its been between 62 percent and 70 percent. (https://fred.stlouisfed.org/series/RHORUSQ156N#0 ) . If there was a shortage of houses, wouldn't we see that rate falling?
Not exactly, as ZIRP and QE made real interest rates SO low that it caused a decent number of people to switch from rent to buy. The main reason it hasn’t fallen further in the last few years since interest rates have risen is that people are staying in their homes where they locked in low rates earlier.
In any case, that percentage of homeownership is a much poorer gauge of relative housing supply than the fact that housing prices have gone up so much relative to other costs. Greater supply is what will reduce costs.
Housing writ large has inelastic demand, as everyone must live somewhere. Pricier housing, of course is more elastic and so prices at the high end *may* go up less when supply is constricted.
Exactly. A shortage of nice places to live, close to the high paying jobs.
The biggest lack is the lack of good neighbors. Plenty of “good people” are mediocre, not bad, neighbors. Often those many without kids, or unmarried with kids. Good neighbors take care of themselves, like mowing lawns & DIY home improvement, plus are available as resources for others in the neighborhood. Neighbors with names.
On Edu changes, a non-partisan 30% Rep & 30% Dem professor requirement is far more likely to get the desired, and important, viewpoint diversity. (Now to read that Manhattan Statement)
"Instead of dictating what can or cannot be taught, require universities to clearly label courses and materials when they present politically contested assumptions as fact."
It's completely unworkable to set up a system that could try to 'require' such labels.
For over a decade I've been arguing for "adversarial pedagogy", especially when one is covering the history of a field's intellectual development, by placing the prominent cases and arguments in the context of the dialectic debates of their time and contraposing them with the best counterarguments from those debates.
As an example, in Law School, at least when covering the key cases, students are usually required to read - and become able to wield the arguments given in - both the opinion and the dissents. You don't need to name a class "The Progressive View on Constitutional Law" when the students are reading just as much Justice Scalia as Justice Ginsburg.
Other examples could include teaching the Declaration of Independence alongside Thomas Hutchinson's Strictures upon the Declaration, or the Federalist Papers alongside the Anti-Federalist Papers, or John Stuart Mill vs James Fitzjames Stephen or Carlyle, or even trying to recapture the debate between Origen and Celsus. Seems like something AI would be excellent at arranging, heh, AI could also be "Adversarial Instruction".
I wonder if labeling would end up like California and food ingredients. So many are marked potentially cancer causing that people pretty much ignore the warnings. In fact, it might be honest to label just about every course as presenting some politically contested assumptions as fact.
“ It's completely unworkable to set up a system that could try to 'require' such labels.”
I think the rest of your arguments are valid, and your suggestions great, although law school examples aren’t the best, as lawyer is one of the few professions where people are expected - even by leftists - to be able to talk both sides of an argument.
But your quoted statement I disagree with as too extreme. It is no more and no less a labeling/information regulation. We have it for most packaged food items.
Of course it would be gamed and imprecise in education. But I’d argue it would still be better than nothing.
And given all the other strings we attach to federal money, attaching this small one would imo be a good (small) idea.
Whatever happened to the dialectic? When I was in college it was all about the dialectic and no Marxist analysis was complete without it. The notion of an Oppressor / Oppressed dynamic was necessarily unstable because there was always an ongoing synthesis as demanded by the analytical framework. What transpired to make the Oppressor / Oppressed axis so glacial and monolithic in academia? Was it... a torrent of government funding?
I remember a couple years ago Bill Simmons talking on a podcast about how he and his wife got kinda freaked out when they walked past their 13 year old son's room and heard a grown man's voice coming from within. It turned out their son had hired a "Fortnight Coach" to help him get better at the game, and this 'coach' was some anonymous 40 year old guy their son had met online and the two of them were conversing regularly now via the voice chats that are enabled in these games. Predator or just run of the mill loser?
You mean *leftists* (or “people on the political left”, or whatever other term for that you prefer), not “liberals”, since most of those people are quite illiberal these days.
Leftist might be more accurate but I was being polite. Most would see leftist as offensive and regardless of whatever other names they might prefer, they'd almost all accept liberal.
“.. not to think in terms of finding the student right or wrong [but rather] asking students to reflect on the issues raised..”
Refactoring this paradox continues to yield good results.
The predecessors of the latest progressive movement tried hard to get here but just could not help putting their fingers deep into the cookie jar of morality. Is there a right and wrong way to think? Rearranging language, I believe there is a right and wrong way to analyze which gets to the heart of Aristotle, Aquinas, Hobbs, JJ Rousseau, Locke, Paine, etc.; all those “western white men” (who after thousands of years, collectively brought about the end of globalized slavery and countless other savage behaviors).
Anyway, it’s very important that we understand what they were thinking while thinking about thinking.
“Reading this, it occurs to me that the way to approach giving an exam on The Social Code is not to think in terms of finding the student right or wrong. It might be asking students to reflect on the issues raised in the seminar.”
Hmmmm….
I consider myself expert on neither morality nor the best way to evaluate learning.
The above smacks to me of moral relativism, or at least the absence of objectivity.
I surely understand that figuring out a really good way to determine - especially by algorithm - how well someone has mastered material is difficult.
But the advice I got from a coworker on how to deal with another brilliant, on-the-spectrum co-worker who was too often too sure that his way of doing things was the only possible way would seem to apply here:
“There are 10 right ways and 100 wrong ways to do almost anything”.
Why do all the words about the housing problem seem to avoid the hub of the problem, having to do with price dynamics? It used to be in LA that every time the market ticked up a few %, someone built a new suburb or city, and the price went back down. If you view supply/demand markets as a feedback loop where demand drives the supply through a price mechanism, you have a system similar to a thermostat in a home. When a surge of new jobs creates a demand pulse, the supply increases, with those on the leading edge of the increase making the majority of the profit from the price increases. However, just as with your home heating system, where a pillow insulates the thermostat, time delays can cause oscillation, resulting in overshooting and undershooting the thermostat set point. Your home thermostat will average near the set point, but housing (in terms of cost/ft2) will not. Going below the break-even cost of housing suppliers can put them out of business for the next cycle, which makes the average housing price much higher than the cost/area calculations.
The government, especially in California, has made the housing supply/demand system unstable with its regulations, adding many years to the permitting process, when we were able to build entire cities like Lakewood in under two years. Economics needs to return to its dynamics and partial differential equations to understand how regulations and delays can destabilize the system.
Erdmann writes a fine article but I have to ask myself the extent to which some of it might not pass a Turing test and whether he might be leaving the perspective of actual home-builders out of his equation.
Erdmann offers 7 supply side housing perspective which to be sure is impressive and certainly to be appreciated. However, as a regular reader of the National Association of Home Builders I am not sure that the perspective of lobbyists working on behalf of the actual suppliers, the builders, is presented as perhaps they might.
The closest he gets, I would guess, is ““We can’t build homes because high interest rates/costs/labor.” In a July 21 NAHB press release makes a similar but somewhat different claim “ Rising construction costs—driven by inflation, supply chain disruptions, and labor shortages—as well as higher regulatory costs, made it increasingly difficult for builders to construct affordable homes. On the other hand, low levels of inventory pushed up the price of new single-family homes, deepening the housing affordability crisis for first-time and middle-income buyers.” This is offered as explanation for “total sales of new single-family homes declined by 17% during the 2020—2024 period. Meanwhile, the median sales price of new single-family homes increased significantly, rising from $330,900 in 2020 to $420,300 in 2024.”
One wonders if the shift to more expensive housing reflects the increasing percent of individuals priced out of the market at the lower end. In a research paper from earlier this year, NAHB claims:
“Housing affordability remains a critical issue, with 74.9% of U.S. households unable to afford a median-priced new home in 2025, according to NAHB’s latest analysis. With a median price of $459,826 and a 30-year mortgage rate of 6.5%, this translates to around 100.6 million households priced out of the market, even before accounting for further increases in home prices or interest rates.”
The shift away from lower priced new home construction is further illustrated by the numbers of of low end qualified potential buyers versus the available housing stock in that range. On the qualifying side, NAHB claims “the minimum income required to purchase a $200,000 home at the mortgage rate of 6.5% is $61,487. In 2025, about 52.87 million households in the U.S. are estimated to have incomes no more than that threshold and, therefore, can only afford to buy homes priced up to $200,000.”
Looking at the population able to afford mortgages in the lower ranges, NAHB claims “while around 53 million households can afford a home priced at $200,000 or less, there are only 22 million owner-occupied homes valued in this price range. This trend continues in the $200,000 to $300,000 price range, where the number of households that can afford homes is much higher than the number of housing units in that range. These imbalances show a shortage of affordable housing.
It seems that in these circumstances, even if builders were constructing and selling $200,000 homes, they would be creating flipping opportunities. Manufactured housing seems to offer an alternative that adddresses the lower income half of the population. “The average cost per square foot for a new manufactured home in 2023 was $86.62, compared to $165.94 for a site-built home (excluding land costs) — a difference of $79.32 per square foot. This difference in cost has only grown over the decade from $51.84 per square foot in 2014. For a 1,500-square-foot home, this translates to a savings of approximately $118,980, and this savings has grown despite the average cost of manufactured homes increasing at a higher growth rate of 7.4% CAGR2 versus 6.1% CAGR for new single-family homes.”
One suspects that manufactured housing could play a much larger role in meeting the demand for lower priced housing. Apparently 4 major obstacles stand in the way of this happening:
“Restrictive Zoning and Land Use Regulation: Manufactured homes are often prohibited in zones set aside for single-family housing absent a special permit. State laws preventing the outright exclusion of manufactured housing can help, but these laws typically do not address the design restrictions that are also important barriers, including roof pitch, cladding, foundation heights, lot sizes, and setback requirements. Indeed, one of the most comprehensive studies of regulatory barriers to manufactured housing found a statistically significant association with stricter regulation and a lower likelihood of any homes being sited in a community.
Market Conditions: However, the same study that found a strong association with strict regulation and lower levels of manufactured homes also concluded that market conditions—including lower land costs, lower density development, and lower household incomes—were equally important in explaining where these homes were more prevalent. This finding highlights that manufactured homes will be most readily adopted in areas where market conditions are favorable.
A Unique and Limited Supply Chain: The same HUD study also noted how the unique supply chain for manufactured homes, in which homebuyers purchase a home from a retailer but are required to find land on their own, complicates matters. Developers seeking to enter this business must learn a new set of specialized skills related to getting local approvals, siting homes, and financing the unusual development process. The location of factories can also be an issue: the number of factories has declined from more than 300 to about 140 today and factories need to be located within 500 miles of the home site to manage transportation costs.
Access to Mortgage Financing: A final constraint is the difficulty homebuyers face in accessing mortgage financing. Manufactured homes are generally considered personal property unless owners take steps to change the legal designation to real property, which is necessary in order to be eligible for mortgage financing. The titling process differs by state but can also be complex and time consuming, requiring that the home be permanently affixed to a foundation. If the home is personal property it must use ‘chattel’ loans that bear higher interest rates and have shorter loan terms which can erode the home’s cost advantages. Mortgage applications are also much more likely to be denied for manufactured homes even when titled as real estate, potentially forcing homebuyers to use more expensive personal loans.”
It was announced just recently (saw it on a local news) that the median price of a single family house in the Boston metropolitan area is now one million dollars.
One of the happy talk anchors assured us that lots of houses were available for less. Do they even know what median means?
“One wonders if the shift to more expensive housing reflects the increasing percent of individuals priced out of the market at the lower end.”
Sorry, I don’t but this as a major factor.
Common sense dictates that if regulation makes it difficult to build, developers will naturally target building homes for the upper end of the market, where their margin percentages and dollars per unit will be higher.
Separately, I don’t actually accept the premise that we need to build more low-end single family housing units [now dense apartments/condos, especially in cities, is another matter, where we surely do].
If we let developers build all the units they want, which will very likely be disproportionately higher end, then people moving out of their existing homes will open up supply for the middle, who when they move will open up supply for the lower end.
There’s nothing at all wrong with the idea that first time, lower income home buyers buy existing homes rather than new ones.
When we sold our home of 20 plus years, moving cities, I realized I didn’t care to own a home in a city anymore - disliking cities so - and chose to regard it as a military posting, just transient. Then too we had Covid and really didn’t even look around much - just taking the second apartment we saw in person because the landlady (they were condo-ized) was super sweet and offered to store a couple of things for us in her barn across the county. One of those oddly was a dishwasher, so she was rewarded when that in the apartment died and we said: let’s just put in ours.
I’m not sure but I think this apartment is almost 1100 ft.²
It would not be any good for “entertaining“ as they say, but it is fine for two people, space-wise. The discomfort of it lies more in its 1963 origin, kitchen drawers that don’t glide and must be shoved; little overhead lighting for some reason; interior doors that don’t really shut; ad hoc remuddling; a super ugly parking area occasions, a lot of drama, for some reason; and a bathroom with a nonsensical layout for a different time. It’s overall a shabby and crappy complex as are most such places that are too big for a handful of mostly old women that make up the HOA, to manage by themselves, as it relentlessly deteriorates - filled with renters, old people on fixed incomes, a handful of families there for the school district and surrounding pleasant “bubble” within a large MSA.
Forget sprucing up, they will never be able to keep up with maintenance and hang on only with the presumably costly services of a new management company, that at least has pulled them out of the red. And people will only agree to very modest assessments. I’m sure not. Everyone pays their dues and there’s nothing to do about that either.
We enjoy the pool so much!
The dirt would be valuable, of course. But it can’t ever be realized. Weird model, that.
Neither here nor there, though. This is indubitably the missing middle or missing lower middle kind of stuff the urbanists are always going on about.
If I were single, and young enough to still care about my material surroundings, still “house-proud” as I was for years - I would definitely prefer 800 ft.² with nicer finishes and greater comfort.
It’s got a great pool, though, and a feeling of outdoor spaciousness that will never exist in the properties being built now that will be in a similar situation in 50 years.
Erdmann is correct about a shortage, but wrong about what's in short supply. It's not houses--we've got plenty of shelter--the shortage is of nice places to live. "Urbanize the suburbs" is an exactly wrong solution to the problem.
The rent and price appreciation has been systematically higher in the least nice neighborhoods. This is one of the key clues about what is happening. The trends in cost have been negatively correlated with amenities, neighborhood incomes, etc.
There is a bit of circular reasoning that I see frequently.
"It's the nice places that are getting expensive. The problem is that the cheap places aren't nice."
"How do you know if a place is nice?"
"I can tell it's nice because people are willing to spend a lot to live there."
How would you confirm if a place was nice and cheap?
I doubt anything would stay "nice and cheap" for long--unless there were lots of places that were equally nice. It would be like having a restaurant that was good, cheap, and never too-crowded, except where people are willing to spend 30% of their incomes on precisely that kind of restaurant. It doesn't happen.
I think the circularity runs the other way. There's a shortage in all the in-demand places, which I can tell, because prices have gotten so high. Well, why isn't there a shortage in the places people don't want to move to . . . Detroit? New Orleans?
Mostly, I think you need a theory of what drives home values. Perhaps that's what you're getting at by looking for a definition of "nice," and I definitely agree that it's not a one-size-fits-all answer (which is partly why I bristle at a one-size-fits-all diagnosis, like "shortage." In some contexts, exclusivity and the relative lack of density is what makes it so attractive, e.g. Park Slope v. Manhattan, or Westchester, etc. People will also pay a lot of money to have rich neighbors--that it's unaffordable is just selection effects at-work. That's not always true, of course--sometimes demand is just basic agglomeration effects, e.g. if you're a young grad on your first finance job, or whatever, you want to be where the action is--you don't care about a yard or trust, and you love density.
You're arguing from a false premise that doesn't match the facts at all.
During the Great Recession, home construction permanently declined by about 70% in Detroit. Since then, Detroit has accumulated about 20% of excess rent inflation. But, it isn't the nicest neighborhoods where rents have risen. Rents have risen more like 40% or 50% in the worst neighborhoods.
None of this is subtle.
https://fred.stlouisfed.org/graph/?g=1KORP
What are net population changes for higher income households? Or did the "nice" neighborhoods start building a lot of multifamily, while the less nice neighborhoods dabbled in NIMBYism? I think you're making my point perfectly--understanding demand is far more important than just counting the number of rooves and rooms.
While I’m not an expert on housing, it seems to me you two are talking past each other in large part by failing to separate (at least) two different things:
1) there is no doubt that NIMBY-based constriction of supply in the most desired cities has driven up prices significantly.
2) there is little doubt that rents everywhere have gone up relative to many other things consumers spend on as real interest rates (and nominal longer term rates) have gone up in the last several years.
I’d argue that it was ZIRP and QE that kept housing (rents) artificially cheap for a long time after the Great Recession.
If Kevin has data that demonstrates my 2nd claim is wrong, I would love to see it.
the opposite. zirp and qe drive home values up the same way free money drives the value of all assets up. when zirp ended, home values started to fall, so everyone (other than builders) stopped selling. just look at commercial real estate, where owners do not benefit from a 30 year mortgage and therefore do not have the option of "not selling." Property values have come down substantially. If home mortgages were floating rate, home values would be down ~15-20%.
Absolute vs % is important. 5 % of Boston median is $50k, 10% of 200k, twice as much rate, is only $20k.
It’s good for a family, married parents with kids, to be in single family houses. Not enough are being built. Especially in Boston & Silicon Valley & high priced nice areas. Because of zoning & limited land in those nice areas.
Few buyers of million $ homes are first time buyers, but the buyers sell their $900k home. To a new buyer who has sold, or is selling, their $800k home, to one who had a $700k to one who had $600k to one who had $500k, 400, 300, 200 who sold their $150k place to a first time buyer.
The USA should be building more houses. Those married couples who own 3 or more houses should not get any loan deductibility.
Total house payments should be flat 30% tax credit, up to half the median annual pre-tax income, so about 62/2 = $31,000 in loan payment, $9,300/tax credit max per year. 2024 taxes calculated with median from 2023.
Single family home ownership is a major reason America has been great, including huge amounts of DIY house repair and learning the self reliance & responsibility of being a home owner. Far far better than govt support for folks going to college, even if it was good college.
“The rent and price appreciation has been systematically higher in the least nice neighborhoods.”
Is this a decades long trend, or only since a few years after the Great Recession? Have you adjusted for real interest rates / long nominal rates and how they affect the price of rental property?
Everyone does have to live somewhere; they don’t, of course have to live in the more expensive areas.
Effectively all of the increase in American aggregate real estate value has been from regressive rent inflation from families moving down into worse housing because of the shortage. Wherever you see elevated housing costs in American markets, it dependably has been related to families trading down into the existing stock of homes because new homes were obstructed or migrating to cheaper cities at such a high rate that those cities get temporarily overwhelmed.
Embrace the power of "and". We have a shortage of enclosed square footage and a shortage of nice places to live.
Shortage bros go first; 2. It’s not obvious we have a shortage anyway, except perhaps in a few cities; 3. the solution of “build more” would make the problem worse, not better, if it meant urbanize the burbs (which it often does); 4. it reflects an impoverished understanding of what drives home values (where lack of density is often a feature, not a bug)
Your points 3 and 4 seem so obviously NIMBY, yet you seem to be pretending not to be a NIMBY.
I'm not pretending to be anything. I think ex-urban land use regs, especially around density, are probably one of the few species of regs that are actually justified. I also think most YIMBYs aren't really YIMBY, in that zoning appears to be the only kind of reg they don't like wrt to housing or otherwise. The very selective application of Hayek makes me suspicious that other game is afoot, e.g. centralizing zoning authority (rather than eliminating it), which is a rather audacious move for urbanites to make, as a response to their own flight from their own dysfunctional urban governance. Mostly, the 'Build More Housing' takes run roughshod over an actual understanding of what drives home values and/or demand, which is, after all, heterogenous across place and time. Plus, real estate is a pretty "efficient" market on the supply side--very competitive, and well-capitalized. The reality is that zoning is just not the prime mover in the "affordability crisis" and it's not even close--demographics, interest rates, and incomes are far more relevant--and I suspect that most efforts to target zoning would result in net-harmful changes.
Well, whatever else you may be correct about (I suspect some, but far less than half), your repeated claims about what drives home value are to me what demonstrate either disingenuousness or cluelessness (I suspect the former, as you seem too well-informed and reasonably intelligent for the latter to be likely).
YIMBYs are distinctly not about optimizing for home values. They are optimizing for having more housing in areas that people want to live in, and openly DO want to reduce the cost of housing, not “optimize” the value (i.e. maximize the purchase price) of housing.
It is NIMBYs who seek to reduce the supply of housing - for multiple reasons, but the obviously biggest one is to maximize the value of their own houses.
I won’t bother engaging on the rest. I do appreciate the reply though. Have a great day.
P.S. While I lean very strongly YIMBY myself, I agree with you that in the suburbs some amount of land use regulation is indeed wholly appropriate. But especially in places like CA with extremely high housing prices and limited supply, those regulations have gone too far. And the fact that the very leftist, regulate everything in sight, supported by wealthy upper middle class homeowners Governor Newsom agrees with me is strong evidence for my POV.
The point is only that people--yimbys too--often want to live in places *without many houses* (and therefore putting more houses there will make those places very much unlike the place they wanted to live). The unaffordability reflects the scarcity of nice, well-located suburbs, and not houses in those suburbs.
The claim that we have plenty of houses seems to be demonstrated by the narrow range long term in which the home ownership rate, that is "the proportion of households that is owner-occupied" fluctuates. Over the last 60 years its been between 62 percent and 70 percent. (https://fred.stlouisfed.org/series/RHORUSQ156N#0 ) . If there was a shortage of houses, wouldn't we see that rate falling?
Not exactly, as ZIRP and QE made real interest rates SO low that it caused a decent number of people to switch from rent to buy. The main reason it hasn’t fallen further in the last few years since interest rates have risen is that people are staying in their homes where they locked in low rates earlier.
In any case, that percentage of homeownership is a much poorer gauge of relative housing supply than the fact that housing prices have gone up so much relative to other costs. Greater supply is what will reduce costs.
Housing writ large has inelastic demand, as everyone must live somewhere. Pricier housing, of course is more elastic and so prices at the high end *may* go up less when supply is constricted.
The number of homes occupied by owners declined during ZIRP and only started increasing again after the Fed started hiking rates.
https://fred.stlouisfed.org/graph/?g=1KQpe
Exactly. A shortage of nice places to live, close to the high paying jobs.
The biggest lack is the lack of good neighbors. Plenty of “good people” are mediocre, not bad, neighbors. Often those many without kids, or unmarried with kids. Good neighbors take care of themselves, like mowing lawns & DIY home improvement, plus are available as resources for others in the neighborhood. Neighbors with names.
On Edu changes, a non-partisan 30% Rep & 30% Dem professor requirement is far more likely to get the desired, and important, viewpoint diversity. (Now to read that Manhattan Statement)
"Instead of dictating what can or cannot be taught, require universities to clearly label courses and materials when they present politically contested assumptions as fact."
It's completely unworkable to set up a system that could try to 'require' such labels.
For over a decade I've been arguing for "adversarial pedagogy", especially when one is covering the history of a field's intellectual development, by placing the prominent cases and arguments in the context of the dialectic debates of their time and contraposing them with the best counterarguments from those debates.
As an example, in Law School, at least when covering the key cases, students are usually required to read - and become able to wield the arguments given in - both the opinion and the dissents. You don't need to name a class "The Progressive View on Constitutional Law" when the students are reading just as much Justice Scalia as Justice Ginsburg.
Other examples could include teaching the Declaration of Independence alongside Thomas Hutchinson's Strictures upon the Declaration, or the Federalist Papers alongside the Anti-Federalist Papers, or John Stuart Mill vs James Fitzjames Stephen or Carlyle, or even trying to recapture the debate between Origen and Celsus. Seems like something AI would be excellent at arranging, heh, AI could also be "Adversarial Instruction".
I wonder if labeling would end up like California and food ingredients. So many are marked potentially cancer causing that people pretty much ignore the warnings. In fact, it might be honest to label just about every course as presenting some politically contested assumptions as fact.
“ It's completely unworkable to set up a system that could try to 'require' such labels.”
I think the rest of your arguments are valid, and your suggestions great, although law school examples aren’t the best, as lawyer is one of the few professions where people are expected - even by leftists - to be able to talk both sides of an argument.
But your quoted statement I disagree with as too extreme. It is no more and no less a labeling/information regulation. We have it for most packaged food items.
Of course it would be gamed and imprecise in education. But I’d argue it would still be better than nothing.
And given all the other strings we attach to federal money, attaching this small one would imo be a good (small) idea.
Whatever happened to the dialectic? When I was in college it was all about the dialectic and no Marxist analysis was complete without it. The notion of an Oppressor / Oppressed dynamic was necessarily unstable because there was always an ongoing synthesis as demanded by the analytical framework. What transpired to make the Oppressor / Oppressed axis so glacial and monolithic in academia? Was it... a torrent of government funding?
But of course, Marx thought we had reached the final oppressor/oppressed state, which would yield to revolution and socialism and the end of history.
Academia may be glacial is staying within an oppressor/oppressed framework but it keeps finding new oppressed groups to be concerned about.
I remember a couple years ago Bill Simmons talking on a podcast about how he and his wife got kinda freaked out when they walked past their 13 year old son's room and heard a grown man's voice coming from within. It turned out their son had hired a "Fortnight Coach" to help him get better at the game, and this 'coach' was some anonymous 40 year old guy their son had met online and the two of them were conversing regularly now via the voice chats that are enabled in these games. Predator or just run of the mill loser?
"require universities to clearly label courses and materials when they present politically contested assumptions as fact."
To take but one example, I suspect there are a lot of liberals who see 1619 as fact, not political opinion.
You mean *leftists* (or “people on the political left”, or whatever other term for that you prefer), not “liberals”, since most of those people are quite illiberal these days.
Truth in labeling, you know. 😏
But otherwise I quite agree.
Leftist might be more accurate but I was being polite. Most would see leftist as offensive and regardless of whatever other names they might prefer, they'd almost all accept liberal.
Thinking about thinking
“.. not to think in terms of finding the student right or wrong [but rather] asking students to reflect on the issues raised..”
Refactoring this paradox continues to yield good results.
The predecessors of the latest progressive movement tried hard to get here but just could not help putting their fingers deep into the cookie jar of morality. Is there a right and wrong way to think? Rearranging language, I believe there is a right and wrong way to analyze which gets to the heart of Aristotle, Aquinas, Hobbs, JJ Rousseau, Locke, Paine, etc.; all those “western white men” (who after thousands of years, collectively brought about the end of globalized slavery and countless other savage behaviors).
Anyway, it’s very important that we understand what they were thinking while thinking about thinking.
“Reading this, it occurs to me that the way to approach giving an exam on The Social Code is not to think in terms of finding the student right or wrong. It might be asking students to reflect on the issues raised in the seminar.”
Hmmmm….
I consider myself expert on neither morality nor the best way to evaluate learning.
The above smacks to me of moral relativism, or at least the absence of objectivity.
I surely understand that figuring out a really good way to determine - especially by algorithm - how well someone has mastered material is difficult.
But the advice I got from a coworker on how to deal with another brilliant, on-the-spectrum co-worker who was too often too sure that his way of doing things was the only possible way would seem to apply here:
“There are 10 right ways and 100 wrong ways to do almost anything”.
Why do all the words about the housing problem seem to avoid the hub of the problem, having to do with price dynamics? It used to be in LA that every time the market ticked up a few %, someone built a new suburb or city, and the price went back down. If you view supply/demand markets as a feedback loop where demand drives the supply through a price mechanism, you have a system similar to a thermostat in a home. When a surge of new jobs creates a demand pulse, the supply increases, with those on the leading edge of the increase making the majority of the profit from the price increases. However, just as with your home heating system, where a pillow insulates the thermostat, time delays can cause oscillation, resulting in overshooting and undershooting the thermostat set point. Your home thermostat will average near the set point, but housing (in terms of cost/ft2) will not. Going below the break-even cost of housing suppliers can put them out of business for the next cycle, which makes the average housing price much higher than the cost/area calculations.
The government, especially in California, has made the housing supply/demand system unstable with its regulations, adding many years to the permitting process, when we were able to build entire cities like Lakewood in under two years. Economics needs to return to its dynamics and partial differential equations to understand how regulations and delays can destabilize the system.
Erdmann writes a fine article but I have to ask myself the extent to which some of it might not pass a Turing test and whether he might be leaving the perspective of actual home-builders out of his equation.
Erdmann offers 7 supply side housing perspective which to be sure is impressive and certainly to be appreciated. However, as a regular reader of the National Association of Home Builders I am not sure that the perspective of lobbyists working on behalf of the actual suppliers, the builders, is presented as perhaps they might.
The closest he gets, I would guess, is ““We can’t build homes because high interest rates/costs/labor.” In a July 21 NAHB press release makes a similar but somewhat different claim “ Rising construction costs—driven by inflation, supply chain disruptions, and labor shortages—as well as higher regulatory costs, made it increasingly difficult for builders to construct affordable homes. On the other hand, low levels of inventory pushed up the price of new single-family homes, deepening the housing affordability crisis for first-time and middle-income buyers.” This is offered as explanation for “total sales of new single-family homes declined by 17% during the 2020—2024 period. Meanwhile, the median sales price of new single-family homes increased significantly, rising from $330,900 in 2020 to $420,300 in 2024.”
( https://eyeonhousing.org/2025/07/sales-of-lower-priced-new-single-family-homes-declined-over-the-past-five-years/ )
One wonders if the shift to more expensive housing reflects the increasing percent of individuals priced out of the market at the lower end. In a research paper from earlier this year, NAHB claims:
“Housing affordability remains a critical issue, with 74.9% of U.S. households unable to afford a median-priced new home in 2025, according to NAHB’s latest analysis. With a median price of $459,826 and a 30-year mortgage rate of 6.5%, this translates to around 100.6 million households priced out of the market, even before accounting for further increases in home prices or interest rates.”
The shift away from lower priced new home construction is further illustrated by the numbers of of low end qualified potential buyers versus the available housing stock in that range. On the qualifying side, NAHB claims “the minimum income required to purchase a $200,000 home at the mortgage rate of 6.5% is $61,487. In 2025, about 52.87 million households in the U.S. are estimated to have incomes no more than that threshold and, therefore, can only afford to buy homes priced up to $200,000.”
Looking at the population able to afford mortgages in the lower ranges, NAHB claims “while around 53 million households can afford a home priced at $200,000 or less, there are only 22 million owner-occupied homes valued in this price range. This trend continues in the $200,000 to $300,000 price range, where the number of households that can afford homes is much higher than the number of housing units in that range. These imbalances show a shortage of affordable housing.
(https://eyeonhousing.org/2025/03/affordability-pyramid-shows-94-million-households-cannot-buy-a-400000-home/ )
It seems that in these circumstances, even if builders were constructing and selling $200,000 homes, they would be creating flipping opportunities. Manufactured housing seems to offer an alternative that adddresses the lower income half of the population. “The average cost per square foot for a new manufactured home in 2023 was $86.62, compared to $165.94 for a site-built home (excluding land costs) — a difference of $79.32 per square foot. This difference in cost has only grown over the decade from $51.84 per square foot in 2014. For a 1,500-square-foot home, this translates to a savings of approximately $118,980, and this savings has grown despite the average cost of manufactured homes increasing at a higher growth rate of 7.4% CAGR2 versus 6.1% CAGR for new single-family homes.”
(https://eyeonhousing.org/2025/04/manufactured-homes-an-alternative-means-of-housing-supply/ )
One suspects that manufactured housing could play a much larger role in meeting the demand for lower priced housing. Apparently 4 major obstacles stand in the way of this happening:
“Restrictive Zoning and Land Use Regulation: Manufactured homes are often prohibited in zones set aside for single-family housing absent a special permit. State laws preventing the outright exclusion of manufactured housing can help, but these laws typically do not address the design restrictions that are also important barriers, including roof pitch, cladding, foundation heights, lot sizes, and setback requirements. Indeed, one of the most comprehensive studies of regulatory barriers to manufactured housing found a statistically significant association with stricter regulation and a lower likelihood of any homes being sited in a community.
Market Conditions: However, the same study that found a strong association with strict regulation and lower levels of manufactured homes also concluded that market conditions—including lower land costs, lower density development, and lower household incomes—were equally important in explaining where these homes were more prevalent. This finding highlights that manufactured homes will be most readily adopted in areas where market conditions are favorable.
A Unique and Limited Supply Chain: The same HUD study also noted how the unique supply chain for manufactured homes, in which homebuyers purchase a home from a retailer but are required to find land on their own, complicates matters. Developers seeking to enter this business must learn a new set of specialized skills related to getting local approvals, siting homes, and financing the unusual development process. The location of factories can also be an issue: the number of factories has declined from more than 300 to about 140 today and factories need to be located within 500 miles of the home site to manage transportation costs.
Access to Mortgage Financing: A final constraint is the difficulty homebuyers face in accessing mortgage financing. Manufactured homes are generally considered personal property unless owners take steps to change the legal designation to real property, which is necessary in order to be eligible for mortgage financing. The titling process differs by state but can also be complex and time consuming, requiring that the home be permanently affixed to a foundation. If the home is personal property it must use ‘chattel’ loans that bear higher interest rates and have shorter loan terms which can erode the home’s cost advantages. Mortgage applications are also much more likely to be denied for manufactured homes even when titled as real estate, potentially forcing homebuyers to use more expensive personal loans.”
( https://www.jchs.harvard.edu/blog/five-barriers-greater-use-manufactured-housing-entry-level-homeownership )
But these seem like opportunities for market-oriented public policy entrepreneurs.
It was announced just recently (saw it on a local news) that the median price of a single family house in the Boston metropolitan area is now one million dollars.
One of the happy talk anchors assured us that lots of houses were available for less. Do they even know what median means?
“One wonders if the shift to more expensive housing reflects the increasing percent of individuals priced out of the market at the lower end.”
Sorry, I don’t but this as a major factor.
Common sense dictates that if regulation makes it difficult to build, developers will naturally target building homes for the upper end of the market, where their margin percentages and dollars per unit will be higher.
Separately, I don’t actually accept the premise that we need to build more low-end single family housing units [now dense apartments/condos, especially in cities, is another matter, where we surely do].
If we let developers build all the units they want, which will very likely be disproportionately higher end, then people moving out of their existing homes will open up supply for the middle, who when they move will open up supply for the lower end.
There’s nothing at all wrong with the idea that first time, lower income home buyers buy existing homes rather than new ones.
800 v. 1200
When we sold our home of 20 plus years, moving cities, I realized I didn’t care to own a home in a city anymore - disliking cities so - and chose to regard it as a military posting, just transient. Then too we had Covid and really didn’t even look around much - just taking the second apartment we saw in person because the landlady (they were condo-ized) was super sweet and offered to store a couple of things for us in her barn across the county. One of those oddly was a dishwasher, so she was rewarded when that in the apartment died and we said: let’s just put in ours.
I’m not sure but I think this apartment is almost 1100 ft.²
It would not be any good for “entertaining“ as they say, but it is fine for two people, space-wise. The discomfort of it lies more in its 1963 origin, kitchen drawers that don’t glide and must be shoved; little overhead lighting for some reason; interior doors that don’t really shut; ad hoc remuddling; a super ugly parking area occasions, a lot of drama, for some reason; and a bathroom with a nonsensical layout for a different time. It’s overall a shabby and crappy complex as are most such places that are too big for a handful of mostly old women that make up the HOA, to manage by themselves, as it relentlessly deteriorates - filled with renters, old people on fixed incomes, a handful of families there for the school district and surrounding pleasant “bubble” within a large MSA.
Forget sprucing up, they will never be able to keep up with maintenance and hang on only with the presumably costly services of a new management company, that at least has pulled them out of the red. And people will only agree to very modest assessments. I’m sure not. Everyone pays their dues and there’s nothing to do about that either.
We enjoy the pool so much!
The dirt would be valuable, of course. But it can’t ever be realized. Weird model, that.
Neither here nor there, though. This is indubitably the missing middle or missing lower middle kind of stuff the urbanists are always going on about.
If I were single, and young enough to still care about my material surroundings, still “house-proud” as I was for years - I would definitely prefer 800 ft.² with nicer finishes and greater comfort.
It’s got a great pool, though, and a feeling of outdoor spaciousness that will never exist in the properties being built now that will be in a similar situation in 50 years.