The case for calling the housing market a bubble:
- home prices have shot up
- the market's "frenzy"
@RobertJShiller described this aspect of bubbles to me as "a sort of epidemic of an idea, of a feeling of what one should do with one’s life or leisure or what’s cool."
More reasons:
- Many arguments against bubble-theory are that the fundamentals (low interest rates, Millennials entering the market) would of course lead to higher prices.
But as @AliWolfEcon explains, that's been true for years. So why the rapid price increase now?
The case against:
- Well, the fundamentals. There's a lot less supply because of historically low under-building and there's a lot more demand! Personal savings rate is up so people can afford downpayments etc. etc.
But why does it matter? Obviously we care if a crash would lead to a massive recession.
But last year's & this year's average home buyer has a great credit score and is less likely to default on their mortgage than during the last housing bust.
Either way, the long term solutions to our housing crises are the same. There are not enough homes. Starter homes in particular are at drastic lows.
But historic under-building especially in job-rich areas is going to continue creating bad market dynamics unless resolved.
While "housing bubble" questions are extraordinarily popular, the fundamental problem is less exciting. So I put it in there at the bottom for the real readers.
In an extremely unbalanced market where sellers may get several offers well above asking price, they have the to choose between similar bids with non-price metrics, for instance how much they like the buyers (often based on a personal cover letter).
Hobart, a lawyer who lives in the suburbs of Pittsburgh, relayed to me how weird it was to do this as he looked for a house with his wife last year:
We were "trying to have some way of standing out by saying that we’re nice, normal people" in our cover letter.
Biden and Klobuchar had two separate zoning proposals in April. Now @kristoncapps reports that the Biden team is just adopting Klobuchar's idea (and abandoning their original one?)
This is weird because they were complementary plans!
Biden's original plan was to require cities to act before getting the funding and Klobuchar's plan was to help them get there!
Neither of them would completely fix the problem of course but it would be helpful to have multiple bites of the apple here.
Here's my article on Biden's plan and Klobuchar's plan as well as @kristoncapps' article from this AM!
New >> @JohnFPfaff helps me think through how accountability and justice can be at odd with each other and how that might play out following the conviction of Derek Chauvin.
Following the conviction we heard Rep. Jim Jordan call it proof that "the system works". He's not alone in thinking that.
Then we talked about something I know a lot of criminal justice reform advocates struggle with. Advocating against mass incarceration means shorter sentences for violent criminals. So how should we think about what an appropriate sentence is for someone like Chauvin?
While Biden's recently announced grant program will provide $$ to localities who remove exclusionary zoning policies, Klobuchar's program helps them get there.
There are localities that are interested in figuring out how to upzone, but don't have the in-house resources to do it. Klobuchar's grant program would give them the ability to hire or contract seasoned planners who can develop a plan for them.
New >> A new study found a significant decline (15-20%) in police homicides in places that saw BLM protests from 2014-2019.
The flipside? The study shows that places that saw BLM protests also experienced a 10% rise in murders over 2014-2019. vox.com/22360290/black…
Thanks to Travis Campbell at UMass Amherst (who smartly doesn't appear to be on twitter) for walking me through your research and h/t to @owasow for flagging this piece of research and talking me through the underlying protest literature. vox.com/22360290/black…
First, on the good news. Not only did BLM protests correlate with a significant decline in police homicides. The larger and more frequent the protests were, the bigger the decline.
The decrease is also persistent, widening 14 percentage points from year 0 to year 4 of protests.
To eliminate exclusionary zoning, reducing opposition to new multi-family construction is key.
I asked @DataProgress to message test an economic and racial justice case for reforming zoning laws and the former performed **10 percentage points better**.
Republican voters net support rises **14 points** when presented with an economic case relative to the racial justice arguments.
This is just one poll and I think the best argument is what works for your community. But I've yet to see compelling evidence that making the racial justice case gets you more voters than just making the economic one.