Housing is a human right and a human necessity.
Housing is also the designated path to intergenerational wealth accumulation and class mobility (it used to be housing *and* labor rights, but America got rid of those in the Reagan years).
Housing can't be both an essential speculative asset and a human right. If the way you provide a better life for your kids is to buy a house and wait for its value to go up, then you require one of the essentials of human existence to get *much* more expensive.
This has an immediate effect: people who don't have houses can't afford them, and the people who do have houses vote for policies that make houses more valuable, including eroding tenants' rights.
The fewer rights tenants have, the more rights landlords have, and the more a home is worth to a landlord, which means that house valuations go up across the board.
Landlords' and homeowners' interests aren't always aligned. Landlords favor lax zoning rules, because the market will value a home not just on how much rent can be extracted from it today, but also on how much the same land could generate if it sported an apartment building.
Whereas owner-occupiers tend to be NIMBYs, with an inchoate but near-religious certainty that allowing more homes to be built in their neighborhoods will "change its character" and "lower property values."
Taken together, this results in a perfect storm of terribleness. By the time the owner-occupier's kids are ready to find their own place, they enter a market of vastly overpriced housing, sky-high rents, and shocking undersupply of new homes.
That's where we are now. In "The housing theory of everything," a long essay for Works In Progress, Sam Bowman, John Myers and Ben Southwood walk through the myriad pathologies arising from rentierism and the undersupply of housing.
They propose a plausible rule-of-thumb for measuring the gap between housing demand and supply: the difference in cost between building a new home and the cost of buying a comparable existing home is the price of NIMBYized zoning restricting housing supply.
The authors cite a study published in the American Economic Journal that estimated that relaxing the density rules in NYC, SF and San Jose to the national average would boost US GDP by 8.9% - offsetting nearly all the losses from lockdown.
And they point out that looser density rules aren't wild-eyed schemes - they're the norm in cities like Tokyo and Seoul, and were common in NYC until the 1930s.
The authors propose moving to (or creating) dense cities as a better social mobility path than squatting on a house while its value appreciates - and the two are incompatible, because high housing prices in big cities make them inaccessible to people from small towns.
In 1960, a housekeeper who moved from Alabama to NYC would see 84% higher wagers (70% higher after rent). Today, the worker will see a 28% rise in income - but a real-terms pay cut after their rent is paid.
For people who *do* make the move, the high price of housing negatively impacts nearly every part of their lives: the cost of extra bedrooms limits the number of kids you can afford. People unwilling to make the sacrifice end up in cheaper suburbs.
People in suburbs drive more, are more prone to obesity, and have far larger carbon footprints than their urban cousins. But suburbs can become cities - they just need to increase their density by building more homes.
New homes are good homes: they're better insulated, have lower energy and carbon footprints. The only thing standing in the way is NIMBYism, and the authors propose a way to address is: hyperlocal direct democracy.
"No construction would happen anywhere that a majority did not opt for it, but streets that voted for more density would become extremely valuable, so there would be a big incentive for homeowners in high-demand areas to vote for greater density."
The fight against weaponized shelter - against housing as a commodity, rather than a human right - has gone global. Berlin just held a referendum on whether to expropriate corporate landlords and put housing into public ownership:
They overwhelmingly (56%-39%) voted in favor of the proposal. The vote is nonbinding, but the political cost of ignoring it will be steep, and 240,000 homes are at stake. That could make for a *lot* of happy voters.
The decision to accumulate wealth through owning other peoples' homes is a devil's bargain. Left unchecked, it creates a drag on all productive sectors of the economy, imposing a cost on all of us to the benefit of a minute elite of corporate rentiers.
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