Public Comment

The Housing "Crisis".

Tom Lord
Friday March 25, 2016 - 05:41:00 PM

Editor's Note: This article by Professor Dick Walker in the East Bay Express, Why is There a Housing Crisis? is well worth reading, as are the comments on it which follow.

To further underscore what Richard Walker is saying consider first that there is no housing shortage - fewer roofs than people - in the greater Bay Area. Instead, the trend is for increased segregation and, perversely, longer and more crowded commutes.

The working poor as well as middle class families increasingly take to the outer parts of the region. The most affluent scoop up housing in San Francisco, initially displacing workers from The City to the East Bay, and then themselves putting pressure on East Bay cities like Oakland, Emeryville, and Berkeley. 

Today, public transit systems and highways are filled past the breaking point and communities are scattered in the chaos of forced displacement -- yet there are plenty of roofs to go around. No shortage. 

Many strategies can help to better align housing prices with regional incomes ranging from wage reform, to rent controls, to increases in social ownership of housing, and more. The legal obstacles are severe but what choice is there? 

The myth that giving investors free reign to develop will cure the problem is nonsense. Sophisticated investors are fully capable of not making the mistake of building enough housing to bring down prices and thus lower their profits. 

Walker suggests an overshoot in development will nevertheless occur at the next big economic bust but there, I think he is too optimistic. A major crash in 2000 and a global financial system train wreck in 2008 both came and went but housing affordability in land-constrained major cities only got worse, almost without interruption. There will be no overshoot. Unless capital collapses entirely, we ought to assume this is the new normal and turn our attention to altering the basic rules that determine housing prices in the first place