On the Housing Crisis

Rethinking Federal Housing Policy

In Wealth of Nations, Adam Smith implicitly talks about how the role of the Economists it to be able to consider problems that span across multiple rooms. Presumably what he means by this is the ability to consider what’s happening simultaneously in multiple different areas of the Economy and be able to construct a cohesive picture of the situations.

Thinking about the housing affordability crisis is certainly a muti-room consideration. Like the production of a pencil, housing is result of multiple markets

• WSJ article about the impact of the growth of GSE’s following the Great Financial Crisis
• Reports from the Mayor’s Office for housing on the the gap between median income and median housing prices
• Academic Papers on how the housing market compares to perfect competition.

Maybe our energy is best spent at the end of the day on thinking about how housing could be developed along the lines of something like Slate’s Mini Pickup

Housing Shortage

WSJ

Supply of Housing v.s. Supply of Homes for Sale

• “The housing market is divided between markets where the supply of homes for sale is higher than it was before the pandemic, and markets that still have an abnormally low number of homes on the market.” - Source