Everyone agrees that, by lowering credit requirements, Fannie Mae and Freddie Mac played an important role in the recent financial crisis. Now the Obama administration has promised to reform those “government-sponsored enterprises” (GSEs).
However, as faithful Antiplanner ally Ron Utt warns, Obama’s idea of reform is more focused on changing American lifestyles than on preventing more financial debacles. Administration officials speak darkly of the “underside to homeownership” and hint that there are some people who should rent, not own. According to Utt, the hidden agenda is to promote more compact cities.
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As the Antiplanner has noted before, when housing markets are not made unaffordable by land-use regulation, the benefits of homeownership are numerous and significant. While we should encourage people who can’t afford to own a home to buy one, we shouldn’t discourage homeownership either, yet that is the goal of the smart-growth crowd.
As an aside, you have to wonder about a political system that pretends to run housing, education, health care, social security, transportation, agriculture, and numerous other parts of the economy, yet can’t manage to address more than one of these issues at a time or more than perhaps two of them over the course of a year. Instead of trying to run everything poorly, the federal government should turn most of what it does over to states or private enterprise so it can do a few remaining things, such as defense and international trade, well.
we shouldn’t discourage homeownership either, yet that is the goal of the smart-growth crowd.
Randal keeps repeating this utter bullsh–. Why does Randal repeat this lie?
when housing markets are not made unaffordable by land-use regulation,
Randal continues to mislead by not being specific – libertarian darling Glaeser doesn’t fail to be specific when he talks about what type of regulation this is: zoning to maintain large-lot single-fam.
And why does Randal use fear phrases like “soshul injuneerin’ “?
DS
I don’t see a shred of actual data to support this claim. Frankly, I don’t think it exists.
Freudian slip, perhaps?
From the WAPO article: “Now the Obama administration is beginning to look for ways to gradually unwind the massive government programs supporting homeownership and restore the traditional role of the private sector.”
Libertarians have been screaming about state intervention in the housing market, about social engineering thorough state encouragement of homeownership for un- and/or under-qualified buyers. If the above line from the article is correct, especially about “unwinding massive government programs” and restoring the “traditional role of the private sector”, then I don’t get O’Toole’s outrage. One would think he’d be cheering.
But no. It’s twisted around to a “hidden agenda” for compact development. *Headshake*
“…we shouldn’t discourage homeownership either, yet that is the goal of the smart-growth crowd.”
I don’t see any credible evidence of this. The Heritage Foundation article linked is self-referencing, and each time I clicked on a reference link, I got another Heritage Foundation article.
Cost of housing vs regulations.
I have attended conferences in San Jose, my home, Portland and Houston.
The grand kids are graduating from college and the San Jose plan for them is to live down town in a high rise and ride light rail or commute to Stockton 60 miles away for a home on its own lot they can afford.
San Jose instituted an UGB in 1974 and it has never been expanded resulting in home prices 4 time the US average while Portland is about twice. What has Smart Growth and the Urban Growth Boundary produced???
San Jose vs Huston
http://www.newgeography.com/content/001680-how-texas-avoided-great-recession
Tell us about Smart Growth in your city.
“Administration officials speak darkly of the ‘underside to homeownership’ and hint that there are some people who should rent, not own.”
Taken in context, the quote is: “what we’ve seen in the last four years is that there really is an underside to homeownership.” Darkly? I don’t see it. What I see is the fact of the matter. I choose to rent because of the underside to ownership. I and others who post here, especially those who have seen their house’s value plummet and would like to move, agree that there are many downsides to ownership, first and foremost being freedom. Additionally, month-to-month (and even longer term) leasers can more easily and quickly accommodate an abrupt change in salary or job status.
People are capable of renting single family homes on large lots as well as they are capable of renting in compact developments. I’m in a 700ft2, two bed, one bath apartment in a high-density area. For the same price, I could have rented a 2000ft2 four bed, 2.5 bath, two car garage, fenced yard next to a greenbelt and state park in the suburbs. There are always choices.
Housing prices in Portland skyrocketed when urban growth boundaries were frozen. Result – outmigration to Washington, where housing and growth may not be “smart” but are affordable. When available land for housing is artificially limited, it does promote an increase in density. Economics suggest, however, that limiting supply also increases demand for remaining land, driving prices to levels ordinary folks can’t afford. So ordinary Portland folks (1) moved away from utopia to Washington, or (2)built smaller, or (3) tah dah, rent because they can no longer afford to own! Smart growth FORCES people to live closer together. Apparently smart growthers have never bothered to find out WHY people moved to the suburbs in the first place. It was because they WANTED to, in order avoid the congestion and crime that was a natural consequence of living in overcroweded conditions. Back then, living upstairs amd telling the kids to go play in the hall, instead of the back yard, wasn’t considered “smart.” If that is the goal of “smart growth,” Dan, tell us so now, and then hold a referendum to see if that is how we all want to live. Smart growthers don’t ask, though. They prefer to mandate. Right Dan?
Certainly land use regulations have led to scarcity and scarcity leads to higher prices. The logic is simple enough and the facts support the logic.
Subsidizing housing through the mortgage interest deduction helped many Americans achieve a level of financial security that could be achieved in no other way. That financial security led to increased money for college, medical care, retirement, and even a nest egg to passed on to heirs. The downside was less revenue for the government to spend. Not a bad trade off.
We have now burdened future generations with an incredible debt and a web of regulations that would take years to unravel. We have handicapped their prospects in order to maintain pristine green belts and transit friendly neighborhoods. New ideas are forbidden in this world of professional planners and public works directors interested only in their own fiefdoms. Freedom to choose how to live comes at a higher cost not because of actual impacts but from perceived impacts on theoretical problems.
Essentially we have eaten our children in order to maintain what was unattainable, a Utopian vision that progressives foisted upon us as a cure to social ills. That’s the bogeyman called social engineering. Using fear and false science to sell us on schemes that promised the world yet delivered nothing. Empty and costly all at once. Planners have failed to deliver on the promises they made as well. I guess not being able to tell the future dampened their ability to plan worth a darn.
We should continue to advocate home ownership and even “subsidize” it with the interest deduction. We should not however let the government start playing businessman and tell banks who they should loan to. The government has failed us so why keep them in business with more taxes and more power? The next generation has already effectively assumed the debts of the previous generations so it is immoral of us to tell them how to live or where to live.
Certainly land use regulations have led to scarcity and scarcity leads to higher prices. The logic is simple enough and the facts support the logic.
Excellent!
Every time I ask for evidence here, nothing but crickets chirping. Steven implies he has evidence. Let’s see it, and empirical evidence only, and be prepared to discuss the prevalence and scale (that is: no hasty generalizations).
I anxiously await your response.
DS
Hey Dan, just take Econ 101. Price goes up when supply cannot meet demand.
Its just that simple. You are asking for proof of well established (and tested) economic theory.
Can I conclude that you are one the many planners that finished school without taking even basic economics? Or are you just wasting our time? Or refusing to face reality?
Thanks
JK
Every time I ask for evidence here, nothing but crickets chirping. Steven implies he has evidence. Let’s see it, and empirical evidence only, and be prepared to discuss the prevalence and scale (that is: no hasty generalizations).
DS
Dan,
Spare me the theatrics. A simple Google search yields numerous studies supporting my statement. Facts. Go look ’em up and quit the nonsense of ignoring the obvious. Your tiresome defense of the panning community has lost all credibility.
Growth management and housing prices: the case of Portland, Oregon
J Phillips, E Goodstein – Contemporary Economic Policy, 2000
From the conclusion:
So there is empirical evidence showing that the UGB puts upward pressure on prices. However, the greatest factors driving housing prices in Portland are demand and the bull market and housing asset bubble driven by the Federal Reserve’s monetary policy that has significantly eroded the dollar’s value since the mid-1990s. (Compare the value of gold in 1995 to its value today; do the same for housing prices.)
Can we move on now?
I don’t see a shred of actual data to support this claim. Frankly, I don’t think it exists.
You’re just not looking hard enough.
I applaud the Obama administration for reconsidering its policies toward home ownership. However, it is clear that the federal government is not going to simply be withdrawing from the housing market, which would be the best course of action in my opinion. It now seems intent on tinkering with the rental housing market in much the same way it did with owner-occupied housing. We should expect the same predictably bad results.
It’s hard to tell whether this will become another part of the “livability” agenda at this point, but I wouldn’t be too surprised. The federal government’s capacity for meddling seems to become amplified when they see opportunities for “coordination” across agencies.
I’ve stated here many times – and asked for it again above (“hasty generalization”) that you cannot hastily generalize or conflate. And the premise that all regulation creates shortages is comical in reality.
Also, you must be able to speak to a community’s wanting to have a particular style of growth and whether the outcomes are wanted, and how hastily generalizing that weakens an assertion.
I suspect this thread will be like all the other ones on this site: all hand-flapping and subject-changing. I’m going up in the mountains to hunt mushrooms so you boys feel free to mischaracterize both me and reality, now.
DS
Dan,
Nobody on this website has ever said that all regulation creates shortages. Thus your comments are yet again a figment of your imagination.
Please stop smoking the MJ so much before you post. A little goes a long way toward relieving the pain of your mental illness.
I don’t recall anyone in the thread so far suggesting that “all regulation creates shortages.” As for the suggestion that “you must be able to speak to a community’s wanting to have a particular style of growth and whether the outcomes are wanted,” I am left remembering Bill Clinton’s famous statement “that depends upon what the meaning of the word is is.” Too often, planners dictate what the people in a community will be able to do, without ever attempting to determine whether the people within the community actually share the same goals as the planners. The confusing part of the statement is in determining whether what “the community wants” is referring to the wants of the planners or to those of the people in the community. Oddly, though, I find myself thinking that the previous poster’s observation was little more than a hasty generalization. Oh … a cricket!
For whatever it’s worth, it’s been a tremendous year for chanterelles in the upper midwest. Hopefully so in whatever mountains you hunt in.
What the community wants is what the community pays for and vice versa. Unless there are no other choices available in that commmunity.
JimKarlock said: Can I conclude that you are one the many planners that finished school without taking even basic economics? Or are you just wasting our time? Or refusing to face reality?
THWM: Karlock, you ran for public office so that makes you a “planner” too.