If we had a free market for housing, it’d bring rents down exactly this way.
The value of housing is set by the availability of the land and the proximity to useful natural resources and infrastructure.
We do have a free market for housing. What we don’t have is an infinite supply of vacant habitable land. Nor an infinite supply of freely accessible building materials.
This is a consequence of Enclosure policies, beginning in the 12th century and accelerating into the 17th and 18th centuries with the closing of European frontiers and a boom in the human population.
Housing in the U.S. is one of the most restrictively-regulated markets in existence.
That doesn’t mean much, given how laissez-faire the US has operated for the bulk of its existence.
What’s regulated is the legal transfer of property, largely as a response to the (often violent) historical disputes over land ownership.
But monopolization of real estate, in part thanks to loose monetary policy and in part thanks to the radically higher yield of lands following industrialization, is what limits individual access to housing.
With all due respect, this sounds like sophistry. The U.S. is generally very laissez faire in many things, but very much not so in the realm of land use. We have plenty of habitable land yet, but Euclidean zoning restricts what we’re allowed to do with it. In my city, which is typical in this regard, most of the land area is locked-in by law to single-family dwellings. We had a pretty contentious fight at the city council about easing the restrictions on the number of unrelated people who could live together in a house. (Typically, only family members are allowed.) It passed, which increased our available housing supply by a marginal amount.
Changes like this one, the Transit Overlay District zoning, and an apartment construction boom have not solved our housing woes, but we have had among the lowest growth in rental rates in the nation. And, not conincidentally, private equity has very little presence in our real estate market. Other cities that have allowed construction of new housing have similarly kept rental rates lower. Hence the states passing laws to eliminate single-family-only zones, and allowing the next increment of density by-right. Compare to California, the epicenter of the housing crisis, and the effect of very restrictive zoning, and Proposition 13.
The U.S. is generally very laissez faire in many things, but very much not so in the realm of land use.
That’s flatly false.
In my city, which is typical in this regard, most of the land area is locked-in by law to single-family dwellings
Laws written by developers which would change overnight if the largest firms told the city council to change them.
You have this backwards. These are not restrictions on big business. They’re rules written by landlords as part of a cartelization of real estate.
Houston is a great instance of this. We officially have “no zoning”, but so many HOAs and other contractual limits during deed transfer (the “single family” rule being a good example) that you’d never notice the difference.
In areas without extensive deed restrictions, AirBnB style investors have gobbled up available real estate for short term rentals. Efforts at the municipal level to curb this practice die in the same city council and courts that militantly defend the HOA in disputes.
The value of housing is set by the availability of the land and the proximity to useful natural resources and infrastructure.
We do have a free market for housing. What we don’t have is an infinite supply of vacant habitable land. Nor an infinite supply of freely accessible building materials.
This is a consequence of Enclosure policies, beginning in the 12th century and accelerating into the 17th and 18th centuries with the closing of European frontiers and a boom in the human population.
That doesn’t mean much, given how laissez-faire the US has operated for the bulk of its existence.
What’s regulated is the legal transfer of property, largely as a response to the (often violent) historical disputes over land ownership.
But monopolization of real estate, in part thanks to loose monetary policy and in part thanks to the radically higher yield of lands following industrialization, is what limits individual access to housing.
With all due respect, this sounds like sophistry. The U.S. is generally very laissez faire in many things, but very much not so in the realm of land use. We have plenty of habitable land yet, but Euclidean zoning restricts what we’re allowed to do with it. In my city, which is typical in this regard, most of the land area is locked-in by law to single-family dwellings. We had a pretty contentious fight at the city council about easing the restrictions on the number of unrelated people who could live together in a house. (Typically, only family members are allowed.) It passed, which increased our available housing supply by a marginal amount.
Changes like this one, the Transit Overlay District zoning, and an apartment construction boom have not solved our housing woes, but we have had among the lowest growth in rental rates in the nation. And, not conincidentally, private equity has very little presence in our real estate market. Other cities that have allowed construction of new housing have similarly kept rental rates lower. Hence the states passing laws to eliminate single-family-only zones, and allowing the next increment of density by-right. Compare to California, the epicenter of the housing crisis, and the effect of very restrictive zoning, and Proposition 13.
That’s flatly false.
Laws written by developers which would change overnight if the largest firms told the city council to change them.
You have this backwards. These are not restrictions on big business. They’re rules written by landlords as part of a cartelization of real estate.
Houston is a great instance of this. We officially have “no zoning”, but so many HOAs and other contractual limits during deed transfer (the “single family” rule being a good example) that you’d never notice the difference.
In areas without extensive deed restrictions, AirBnB style investors have gobbled up available real estate for short term rentals. Efforts at the municipal level to curb this practice die in the same city council and courts that militantly defend the HOA in disputes.