"Unfortunately much of the financial system (in the US anyway) is highly dependent on population growth."
I came to this discussion ctrl-f'ing for "deflation" and while I got zero hits, your comment is close enough ...
I will abstract one level deeper and rephrase what you said as:
"Much of the financial system is highly dependent on economic growth."
There continues to be fervent discussion of the results of QE over the last 10 years and the results of various covid stimulus packages and how these things could be inflationary, etc., etc.
Some of this may come to pass - we may, indeed, find ourselves in geographic or temporal pockets of inflation - possibly very high inflation.
Make no mistake, however: the world we are living in is massively deflationary and even dramatic and innovative attempts to maintain (low) inflation are barely keeping us above water ...
What do you mean? Inflation can be easily created - just create more dollars and credit them to people's bank accounts; you will soon see all kinds of prices going up.
If this was true, then the monetary policies of the 2008 financial crash and the 2020 pandemic would both have created consumer price inflation. They haven't. We've seen some asset price inflation instead. In effect we did create a bunch of dollars and credited them to people's home equity and mutual funds... where it just sat there doing a whole bunch of nothing to consumer prices and wages.
Thought experiment: You print a trillion dollar bill and throw it in a underground vault. You look around. "Hey no inflation" so you print some more. You keep this up for a while. Years pass and someone finds the vault and begins to spend the money inside, what happens?
Right now much of that printed money is sitting in stocks and bonds, what happens when that is no longer a great place to be? What if those dollars decide they want to be used to buy say houses, instead of bonds?
Exactly this; the Fed has been printing like crazy, but the new money has relatively low velocity. Velocity is required for inflation, not just the money itself.
Look at stock market prices of the past ten years; its the largest bull market in US history. The US Dollar isn't getting inflated by the printing; the stock market is.
You know, the idea that we have run out of profitable investments is absurd when you consider the massive housing shortage in major cities. Is the truth that we simply banned all those investments and companies like Uber are trying to work around that backwards legislation?
Even with the benefit of a society built in the image of the automobile (toll free roads, free parking everywhere, highways, sprawl) Uber is not profitable.
Have you seen the stock market, housing, and education -- there is a huge amount of inflation. Technology is keeping it in check for a lot of consumer goods but the dollar has lost a huge amount of its value.
"where it just sat there doing a whole bunch of nothing to consumer prices and wages."
Your primary residence should be thought of as a consumption item, whether you rent or own. If homes cost more to buy or rent since the QE (and they do) then we absolutely have had consumer price inflation.
Too many people consider their house a store of value, a significant portion of their retirement assets, and/or a speculative asset that can be cash out refinanced.
2008 policies wasn't that effective at putting money in people's pockets though. 2020 was more effective, but probably to early to tell if it is inflationary until lockdowns go away and people have more options to spend?
In 2008 and really also in 2020, the bulk of the created dollars wasn't given to people where it might create consumer price inflation, by a vast degree it was allocated at the top. There it is creating asset price inflation local to the place of major injection.
It's a poor stimulus effect if one is trying to use it to move the economy.
TL;DR: QE is mostly meant for banks, it was used to increase bank reserves (as banks were forced to do by the regulators), and didn't substantially increase the amount of money available in the economy. But this time (COVID-stimulus) might be different.
Most of everyone's newfound Billion would sit idle
The inflation would come from the $200K/year everyone was spending, as in if you just gave everyone $200K*expectedRemainingLifeExpectancy, you'd get the same consumer inflation
The extra billions would go into inflating assets.
The key concept here is velocity of money - really interesting concept that surprisingly (at least at first for me) falls out of the formulas in Econ1 classes. It does relatively equate to the actual turnover of a piece of currency, as in how many times does that George Washington bill change hands in the year after you spend it?
The key policy hack is to give help to people who will SPEND the money, not to banks and corps who will just park it in investments.
That gets the multiplier effect you need out of crashes.
Unless everyone moves to protect their new found billion by buying assets, in which case asset prices shoot the roof. This is not a problem, since most assets these days are unproductive, and like you say, no one would notice a difference in their day to day lives. The one place people would notice is housing.
The fix is to see somehow make houses a toxic asset that cost exactly the value the provide in the form of a roof, and no more.
>> somehow make houses a toxic asset that cost exactly the value the provide in the form of a roof, and no more.
Wow, that seems like a plan just bulging with answers to the question: "What Could Go Wrong?". Yikes
Pretty clearly, rent control doesn't work either, it just creates two distorted markets. Homeless shelters don't work except for a few cold nights. Housing projects don't usually create good conditions either.
With housing, the problem is like cars - there is no answer to "what is best?" because everyone needs/wants something different. It is not just 'transportation' or just 'a roof and walls'. I want a sportscar and a 3-bay garage to work on it; you want a pickup truck to haul bursh and supplies for the small cabin you want, and That Guy wants just a lot of Lyft credits and airline miles and a bedroom in a shared apartment because he's rarely there...
It might be better to approach the demand side, just ensure that the regional minimum wages are enough that a full time job is over the poverty level, so people can afford to get housed.
Edit:
Moreover, and maybe more on point:
Housing costs are MANY more things than a mere dry bed, hot shower, and place to cook. Housing is different for everyone, from individuals to families. And the cost includes everything -- the rawaccommodations, the quality, the environment & neighborhood, the convenience, the school district, the expectation that more housing and/or amenities and/or jobs will or won't be built or destroyed in the future, and more.
And so the solution is to either ignore all of that, or destroy it?
Better would be to lift the restrictions on supply, loosen the zoning laws.
/Soapbox (not aimed at you): I've been reading zoning regulations in several localities. "Land of the free" my ass! More like control and conformity. It doesn't make sense to me why accessory dwelling units are not allowed in areas with high demand, or more duplexes, triplexes, and walkups. There's no safety issues involved. It's simply greedy property owners imposing on others because they are selfish and can get away with it.
A lot of it is based on the environment and investment that the existing homeowners have built in the previous decades.
They invested in not only the specific home they bought, but also the neighborhood. They continued investing ever since living there. If they wanted a more dense environment, they would have invested in that sort of location. It costs significantly more to build and maintain less dense-pack areas, from building costs, maintenance costs, to property taxes, and nevermind the emotional investment.
Forced rezoning is to simply declare that:
"Nope, you and your neighbors have made the biggest investment in your life in creating and maintaining your home and local environment, but we want it. You won't even compensate you by buying you out with eminent domain, we're just going to destroy everything you've built and the value of your largest asset by cutting down the trees, paving the grass, and putting up block buildings for all the people that want to live there, destroying the peace and quiet you've paid exorbatant costs and taxes to build and maintain and nevermind the habitat destruction for all the plants & animals either."
It does not work for semi-rural suburbs with 2+ acre zoning, and it doesn't work for quaint San Francisco neighborhoods. I could make more of an argument for the city, since cities are already close to sanitized for wildlife. And, having stopped, for now, a farcical proposal for a high-density building literally in my backyard that would have destroyed a certified endangered species habitat, I can certainly say that it is at best an ignorant prescription.
How is it fair to say that some people built X, we want X, since we can't have it, we'll just take it and destroy it?
More to your point, I can tell you that it is nothing do do with "greedy property owners".
It has to do with having INVESTED in a place and its environmaent, for a specific set of reasons, and having already bought, paid for, and borne the taxes and costs of maintaining that environment, and wanting to preserve that which they have paid for.
If they were actually greedy, they would immediately change the zoning laws to allow all that, as they would EACH make a lot more money from their property, and pay less in taxes. They do NOT make those zoning law changes because they agree that each of them will NOT profit from converting to duplexes/triplexes, etc.
I understand that you may value your neighborhood.
But I think it is tyrannical for you to tell other people they can't safely develop on their property "because you say so". Why should your vote cancel out that of another citizen who wants to build on their own property? What gives you the right? Why don't you and your neighbors buy the property around you if you want to keep it as is?
Zoning laws are a modern invention. Historically everyone lived in mixed in neighborhoods. The businesses, the business owners, and the workers all needed to be near each other. Commuter train service started changing that, and then the automobile, allowing the rich to separate form the poor. A good bit of current zoning practices originated in the last century for classist and racist reasons, mandating the size of lots and houses to keep poor people out.
The regulatory restrictions on the housing supply cause houses to cost more. I assume you would agree? I feel bad for young people who can't afford a house. Will millennials needs to wait for boomers to die before they can afford to get into a house? It worries me that hedgefunds are buying more and more houses, because it is a rigged market and profitable. It embarrasses me that we don't let homeless people pitch a tent and live somewhere besides hiding in underpasses.
Japan is an example of a country that I would say has better zoning regulations. The regulations are set at a federal level, not by municipalities. As the concentration of residents in an area increases the buildings are allowed to increase in height and more businesses are allowed in the area. Industrial areas are kept separate. It is permissible to build housing in an industrial area if one wants to, but not the other way around. That seems logical and fair to me.
San Francisco is a good example of the problems caused by restrictive zoning. It appears that folks who didn't want to change the character of their neighborhood have changed it quite a bit. The San Francisco of today is nothing like it was two generations ago. Only certain people can afford to live there now. Instead of hippies, free thinkers, and musicians it is now a place known for overpaid tech workers, NIMBYs, and bums. It is so dysfunctional that teachers, fire, and police workers can't afford to live there anymore. Is that the character that current property owners cherish? Or their ever increasing property values?
>>Why should your vote cancel out that of another citizen who wants to build on their own property? What gives you the right? Why don't you and your neighbors buy the property around you if you want to keep it as is?
Good question. And you answered it.
We ALREADY DID BUY THE PROPERTY, each of us did. We, and our forebears decided collectively, as the property owners in our locale, that these are the rules that WE want to live under (plus, my town also voted to tax ourselves to actively fund open land purchases, and often donates to conservation groups).
These Ts & Cs are plain to anyone who wants to move in. If you want a 1-fam+2acres, here you go. If you want to build a dense-pack condo, go elsewhere. I'd love to put up a barn for my carbon fiber fabrication biz, but I knew that was not an option when I purchased - I chose this.
Yes, it increases prices, it also increases value.
The increase in prices also increases the supply, even if not in that exact location. Some towns see the opportunity to make more, and they relax their zoning laws and allow denser development.
Some towns don't, and preserve their open space. But all it takes is a couple massive developments breaking the rules to literally destroy generations of maintaining unbuilt spaces and purchasing open land.
I just do not see where it is on anyone outside the locale has the right to say that it is their right to simply destroy all that investment because they want it. That's no different from me declaring that I want this 100 square mile citiscape to be razed and returned to woodland without paying for it.
Again, the solution is exactly as you suggested: buy it.
If you and your friends are so convinced that it is a greater good to have densepack development, then pay the taxes or form a fund to buy sufficient land and become citizens of the locale in sufficient numbers to change the zoning and build it out.
Just because you are a citizen of the country does not mean you are a citizen of this town. Just because I am a citizen of the country, does not mean I'm a citizen of your town.
I shouldn't be able to set the rules in your town any more than you should be able to set them in mine (and yes, some things like environmental standards should be set on a national or even international level).
The difference seems to be that you place more value on what the group has decided versus what an individual may have wanted. That is the definition of tyranny. You and your gang of neighbors would be telling other property owners what they can and can't do with their property. There's 'no principal involved, just that there are more of you.
I side with the individual unless there is a really good reason not to. I'm even offended that you and your neighbors are not just making decisions that apply to you and your neighbors, but also apply to future generations.
Do you have any opinion on the way the Japanese regulate zoning?
I'm not sure equating local democracy to tyranny is a sound argument. We all, from the locale to the nation, get to collectively decide the rules under which we live.
Or, we can fail to decide, and have it decided by whichever warlords come out on top this season.
Taking your individual liberty argument to it's end, it would be perfectly OK for me to build, one inch from your property line, a factory or party hall just under the legal limits of loudness, smelliness, and traffic. According to you, I could say "Hey, it's my property, pss-off!" (remember, your wish to end zoning).
I've literally watched people in a town that formerly had zoning, then voted it out, then had bad sht happen... and I watched them in real time have the realization that "oh, this sh*t wouldn't have happened if we still had those zoning laws, huh?". Then they vote zoning back in.
No intelligent individual buys zoned property intending to break zoning without knowing it is a gamble to get the variance or vote to change the rules.
It is a group of people who each individually decide to put their own resources into building their individual properties, and the town properties, as they best see fit for their purposes. And it is not like zoning laws are static inherited burdens - they are updated continuously, 2x per year in many towns.
We have individually and democratically decided to live by these rules, and to invest our money and efforts, both individually and collectively in maintaining that.
Your town has made similar types of decisions, but perhaps to different ends.
What right do I have to tell your town what to do, and you, mine? (obviously outside of national issues like environmental laws, or collectively going in and buying enough property in your town to get the voting power to change your town's laws)
I'm curious the name of the town you referenced that voted zoning out,
if there's more I can read. I found a reference that modern zoning was
started by the Germans in the late 1800s [0]. This article also
mentions the the basic idea of zoning goes back to antiquity, but just
the distinctions between stinky and noisy outside the walls,
dangerous and filthy between the walls, and every thing else inside.
Also mentioned was the industrial revolution, and the change from people
working in their houses to factories, and needing to separate those.
Also mentioned was modern single use zoning, which has a lot of
criticisms.
You mentioned a factory 1" from my property. That is an extreme example!
The Japanese zoning laws I referenced, and would welcome, do make a
distinction between industrial and residential/commercial, and between
high density and low density. They key is they are flexible and allow
for growth, they are not micromanaged by incumbent homeowners. Low
density includes mixed use, and can grow into higher density over time
if more people move to an area.
I ask you: What about the ability to build an accessory dwelling unit
for grandma on the property you own? Or replacing a single family home
with a duplex or triplex? Those aren't nuisance or safety issues, are
they? Why are those forbidden in most places? What about introducing
small shops and mixed residential/retail properties into residential
neighborhoods? How is anything supposed to change for the better if we
regulate everything to be frozen in time, with incentive, and keep
adding more regulations
over time?
I believe that increasingly restrictive zoning, against things like the
above, are causing a lot of damage to our society. Lots of poeple can't
afford a place to live. Folks have to live somewhere. They tend to
aggregate in cities where the jobs are. Lots of people are stuck with
long commutes. So many modern neighborhoods are absolutely soulless,
without places to gather, places to walk, and variety. People are neatly
divided by income level and race, into bubbles that misunderstand and
demonize each other, spending way too much time in cars.
Just because 51% of people vote on something doesn't mean it's not a
tyranny. That's why they have the phrase "tyranny of the majority".
There's principals involved, or there should be. Otherwise it would be
ok for the majority to ignore and screw over the minority any time they
want. And I think that is happening in this case. It's gone too far.
Homeowners have theirs and are artificially restricting the supply of
housing. They care more about their property values than they do about
other people. I assume there's middle ground to discuss, about things
like noise and pets, anticipating growth, allowing variety, what comes
after car culture, how to explore alternatives, etc. But justifying the
current regulatory regime based on a majority vote, when so many other
people are negatively impacted, just makes me sad for what democracy
has come to mean in this country.
Two things you get wrong:
* Zoning - it takes a 2/3 vote to change zoning; the laws are FAR more popular than you think. There is a movement in my state (Mass) to reduce that to 50% to take advantage of your bandwagon.
* Greed: NO, it's the exact opposite. If I could get a variance, I could put a 2nd apt addition on my house and build a duplex in the front yard, and walk away with $millions for those 4 units (nevermind that I'd just trashed the protected wetlands that make up 2/3 of my yard, and the neighborhood). Every one of my neighbors in the whole town could do the same or better. But no one wants to, because we came for the quiet, the trails, the wildlife. It is the opposite of greed.
* There are plenty of neighborhoods with very high population density and low cost housing within 5 miles of this 2ac-zoned town. But "nobody" wants to go there, because, well, the same reason I don't, dense-pack, pavement, noise, traffic, crime, no room to park+++, and plenty of housing IS being built there (a new 200+units 3.5mi away)
Simply trashing the low-density areas that literally generations have invested in building is not a solution.
I hear you like the Japanese model a lot, but I do not know enough about it to have an informed opinion. I do know that Japan is a very different society than ours, demographically, and culturally. You speak of "individual property rights", but I think that you would find that Japan constrains those much more tightly than in the US.
To your specific question about Grandma Apt, Duplex/Triplex/Quad:
A Grandma suite is typically allowed in these zoned towns with a variance, and sometimes restricted to bona-fide family members (not AirB&B suites). The Duplex/Triplex/Quad is specifically not allowed, BECAUSE HAS MASSIVE MEASURABLE DELETERIOUS EFFECTS on services burden, nuisance and safety. Every single issue changes: traffic, burden on school districts, water/sewer, road maintenance, crime.
Of course, a single instance of a single duplex/triple/quad has a negligable effect, just like a single noisy, polluting factory. But, systemically change the rules so that those are everywhere, and everything changes.
Taking one of the most bucolic 25 SqMi, towns with 8.5K people at 350/SqMi, and changing it to quads makes it a lot closer to 40K ppl, 1700/SqMi. Right now, everyone has an individual well and septic system. With that population, the wells and septic would fail and we'd require an entirely new centralized water & sewer system at a cost of $100s of millions. We already have one tiny such development, and it already has caused well failure for itself and the neighboring wells, requiring a expensive mitigation measures, digging temp hookups to adjacent town systems, etc.
So, if you want to show up with several hundred million dollars to build out all that infrastructure, support 5X larger schools, 5X larger fire & police, road maintenance & buildout, and so forth, then maybe that makes sense. But don't act like "oh, just change the zoning because none of it matters" is an actual argument, because with that argument, you show that you literally do not know what you are talking about. Ignoring collateral effects does not make them disappear. Similarly, ignoring that it is 67% vote and not 51%, does not make you look knowlegable.
And you talk about can't afford it in the city, and long commutes. Well, if that's the problem, you need to focus on higher density taller city buildings, and not on changing zoning in the places that geographically require long commutes. I can get on board with that.
I think there is a real case in the cities for taller and higher efficiency apartments, like the tiny house movement, where it is fewer square feet, but just packed with fold-out storage and conveniences. I don't see how allowing such smaller units would change much about the city, BUT I know that I don't know enough about the topic to say (I've liven on Manhattan in a small apt, could have lived OK in a more efficient such unit, but I don't know enough abt the real situation there to want to impose such a rule change on them).
This is a big topic! I'm not for unfettered no-regulation zoning, I think we have established that. I'm going to ramble a bit, maybe get closer to where we disagree...
You described enjoying the wildlife in your neighborhood. I recognize that it's a shame when a good thing becomes popular, and the influx of too many people ruin it. I've seen that happen with inner city neighborhoods (gentrifying) and beach communities (tourists). Sometimes this gets complicated. For example, the beach I mention is still there only because of the millions of dollars funded almost entirely by the state, county, and nearby city, properties owners enjoy federal flood insurance subsidized by everyone, and despite all that the people that live their think it is their private beach and use every legal trick in the book to keep others out, which seems wrong to me. The gentrified neighborhoods I've seen are part of a city, there's much interconnectedness and less friction to moving between neighborhoods, so it seems popular neighborhoods come and go over the decades, and that is going to happen no matter what, trying to stop that risks causing market distortions like in San Francisco, which hasn't been good for the character of the city.
I wonder how long is reasonable to try to freeze a place in time. Going back several generations there were a lot less people in this country. People were a lot less mobile. Goods were produced closer to home, and the jobs that go along with that. The culture changes, faster now than ever. Maybe people now don't want to deal with other people? I don't know about trying to legislate good neighbors, that can only go so far without causing other problems.
As an aside, my ideal rural small town would have a center with small apartment buildings in a shopping district, surrounded by a half mile of neighborhoods and greenways, surrounded by nature. This is what small-town Spain is like. Farmers commute from their apartments to their fields. The city streets are like an extension of ones livingroom, people able easily gather together because they are near to each other. Not saying I'd legislate that, but I'd like to see such things be possible. The regulations we have certainly don't incentive that.
I'm in favor of letting a place slowly grow. I think overzealous regulations cause distortions like the popularity of air bnb, and developers who will only build luxury units due to the costs of working through the red-tape. There's not enough housing where people want it, close to the jobs. I blame suburban sprawl more than small towns. Who knows what work from home will do? Maybe everyone will move to small towns. Or maybe suburbs will decrease in value as they are abandoned for more vibrant city communities. You mention wells and infrastructure limitations, and I recognize that. I'm not for growth that would outpace genuine practicalities. I know enough about this to know that many of today's suburbs may not be able to sustain their infrastructure, the density is too low, there are too few people per mile of road, water, electric, and sewer to afford the upkeep, they already need to be subsidized by more dense areas. Cities are already subsiding suburbs.
I believe that a significant factor in all this is that houses were not considered to be appreciating assets in the past. This has now become primarily a UK/US/CA/AU/NZ thing. Japan is not like that - houses there are no more considered an appreciating asset than cars are in the US. They build them to last 20 years, and build new ones frequently. Land is not so much an investment given that the population is declining and will continue to do so. I was glad when Trump raised the standard deduction, as a back-handed way of phasing out the mortgage interest deduction. I'd also like to see a land value tax - where a city taxes the land based on what the market wants to build on a piece of land, so someone expecting to keep their 5 acres near downtown has to pay dearly for that. I'd like to be sure that corporations don't get more involved in housing supply issues than they already are, they will lobby for more regulatory capture.
The variance for a grandma cottage, or building out a duplex as an extension out the back of the house or raised roof, is subject to approval from folks who are primarily motivated by the bulk of their retirement saving being invested in their house. Most places simply won't approve anything like that. You have to convince everyone that it is in their best interests, and they don't care so much about you. The lengths some people go to can be despicable, their opposition being a thin veneer over their concerns over resale value, some of it not well reasoned. I'm not saying that is always the case, but it happens a lot.
You mentioned supporting more density in cities, and I would agree.
You also mentioned tiny houses, which I know a bit about. You might find it surprising that there are very very few populated places in this country where it is legal to live in one, and not a lot of unpopulated places, either. Some places like Austin are allowing them as accessory dwelling units, because Austin is one of those places that has priced out the people who made it an attractive place to live (Austin is about the music, and musicians can't afford to live there anymore), I think that it is Portland or somewhere nearby is experimenting with "pocket communities", where a cluster of tiny houses can be grouped together around a common space on a couple/few acres. There is a dying town in Texas that welcomes tiny houses on single family lots, desperate for citizens. There is a town in Florida that allows them on single family lots. NY has an interesting hunting cabin loophole. Outside of that there are counties in some western rural areas with minimum zoning laws, I've heard of that in Iowa (minimally they want to know that you are treating your sewage properly). And that's about it. But most people who want a tiny house would like to live near other people like themselves who are not so house-focused. It's difficult to check on this, one has to search each municipality individually, and read through their 100 page zoning documentations. The tiny house sales people don't tell their customers that eventually a neighbor will call the town zoning inspector who will promptly give them a notice to vacate. You can permit it as a shed and use it as a writer cabin, but not live in it. More and more localities are making it illegal to camp on your land, even rural land, or live in anything except a house made specifically as detailed in the codes (the inspectors don't know what to pass it otherwise), of a specific minimum square footage, with minimum parking and garage spaces, with limits on how many unrelated people can live there. It's stifling and hard to escape. I think it is good for a society to have room for people who want to do something different.
EDIT: On the subject of democracy, and a majority versus super majority, voting for exceptions, etc. I don't believe that "there are more of us", no matter how many more, is a valid justification to impose on even a single person. Unless a decision is unanimous there should be morally valid reasons to impose on those who disagree, not just force of numbers. I stand by my remark that imposing on a minority with no other justification is tyranny. In the case of zoning there are relevant reasons for limitations to discuss.
Like I said, it's a big topic, and this has been an interesting conversation. I'm still in favor of Japanese style zoning, allowing for measured growth, set at a federal level, eliminating some of the wrong incentives individual neighbors have to impose on others, and giving people more flexibility in other areas. I don't know if you have any other thoughts, or if we have reached an impasse?
Yes, Big Topic! (showing how there are no easy solutions)
The Democracy/Tyranny/Unanimity issue has problems. Any decision can be expressed as its reverse: [Freedom From] or [Freedom To]. Requiring unanimity allows any individual to exert their will against the remaining 99.9xx% of the people. I want [Freedom From triplexes and all their knock-on effects], you want [Freedom To build triplexes]. If 99% of the ppl agree with your or me, the last one of us standing imposes our decision on the rest. Not even solvable with defaults. The current default here is [Freedom From development], so we should require 100% unanimity to change it? Literal generations have worked with the same set of rules, and continually agreed, voted and paid large sums to support them, so it's kind of specious to argue that it is not a legit default.
Moreover, just changing the rules is like an unfunded mandate - it imposes huge costs on existing people who have already invested massive amounts in the previously defined structure. This applies to towns that do not have centralized services (water, sewer, etc.) as well as those that do - changing the loads by half an order of magnitude is not free. If you want to change it, bring funding too.
I agree with your point about adding to commutes. MIT traffic studies in our area show how the commute traffic suddenly gelled and nearly doubled commute times with just a few hundred cars added from a couple of towns. Changing all of the zoning in the sub/exurbs will only create an absolutely unworkable mess for everyone, including the newcomers who thought they were getting X, but actually will just get Silicon-Valley-style traffic.
I could probably agree that some kind of larger scale planning is appropriate once the density of employers and people exceeds certain thresholds. E.g., when it is already more than 10,000 residents per square mile, and some number of jobs per square mile, then there should be a planned, and probably large scaling up in allowable density, with design for intra-city transport, lower traffic, etc.. BUT, I still question balancing my/our ability/right to impose that vs the fact that this involves problems that The Market is not good at solving well.
Good stuff. Had to get some of the bickering out of the way first, I guess :-)
I agree about the money for services, practicalities need to be respected. I assume doing better in cities could lighten the load in other places, and that is where we can help the most people the fastest.
On the Democracy/Tyranny/Unanimity issue... A lot of regulation seems to be made for the "average person", and it can be difficult if you don't fit in that mold. From a democracy perspective I'd be happy if there were more (metaphorical) space for people who want to try something different, not just in the (disappearing?) unregulated boonies. I mentioned the Japanese federal zoning, but to be honest that does conflict with my tendency towards preferring more local control for most things, only passing control to higher authorities when all the localities agree. Tilting at windmills perhaps. But as a counterpoint I give you Switzerland! (I'm learning more about their more direct/local democracy, and it is interesting)
I still think that negotiating consensus should be the baseline goal in a democracy, trying to understand and accommodate those who strongly object if within the realm of possibility. I really want what I want, and I also want you to have what you really want.
Back to zoning... You threw out a number... I'm not sure if 99% approach zoning issues in the same way you would. You don't sound like a renter, or someone who moves frequently, or someone struggling to pay bills, or stuck with a bad landlord. Or someone having to deal with a corporate apartment complex putting the squeeze on them with valet trash charges and expensive bundled cable, or an unethical corpation falsely claiming damages against your security deposit. Or a 30 something millenial who doesn't fit the corporate mold and is worried to death about affording a place to live, a family, retirement, and loosing the rat race. Or someone who can only afford to live in a camper. Or someone who has to move back in with the kids to afford living on their social security check. Or one of those people outside Houston or Atlanta with a two hour commute. Or someone who doesn't have a car. Or someone down on their luck and would like a secure place to camp where they can get to a supermarket and a bus stop to get to work, and maybe a port-a-pottie, Or someone who lost their life savings all tied up in their house in 2009. or a multigenerational family. Coporations and rich developers can get variances for their profit optimized investments, but the little guy not easily. Well, you get the idea. I apologize, but I get worked up about all of that :-)
I don't know what the vote would be if more options were given to people. But there are a lot of people in a lot of places who are not happy with the way things are. Current zoning sometimes seems like a bad deal from some of these other perspectives, and I agree.
I'm still learning about all this stuff. Like I mentioned before, I am concerned about the financial incentives behind the status quo, and I'm also concerned about the impact to our culture. So many working families struggling even with two incomes, neighborhoods and neighbors replaced by commutes and strangers. The world has been changing fast. My grandfather was a steel worker, didn't finish high school, and owned an extra cottage near the lake and a retirement/rental in Florida. Zoning has such a huge impact on affordable housing (and transportation costs) for so many people. I assume that financiers and corporations aren't helping.
I imagine the basic supply and demand equation will be quite different in another decade or two when the demographically significant boomer generation are dying in large numbers. I think that we're lucky exception amongst developed countries to have a large millennial generation. The assumption is that birth rates will stay low. Maybe much of this will be a moot point.
yup, well it is a big issue, and as usual, the (apparently) easy and obvious solutions don't work out so well. I totally sympathize with all of those worrisome situations. I see a much better solution would be a proper minimum wage.
Seriously, for anyone who has a business and needs to pay anyone else, if they can't make a profit paying a wage such that a full-time job in that locale is above the poverty line and affording decent housing, then they do not have a business. What they have is organized theft. They are either stealing their employee's lives (poverty shortens life), or stealing from the govt (for their extra support checks).
Having a proper wage base would go far in allowing people to afford housing. Yes, it would push the price up, allow for more creation, etc.
I do think you have a key point there about the issues of price and commuting, and in was echoed in your point about the ppl looking for a place to camp. Making more housing available for poor people who cannot also afford the transportation to do long commutes every day does no one any good, especially when most cities already have massive transport problems. We need not just random housing, but housing near the jobs...
It's the obvious solution. There is a problem with a lack of jobs in rural communities. These people need a temporary solution that lets them get back to their feet. Doing demand side stimulus does help them but in a completely different way and this has absolutely nothing to do with the housing market which is the biggest concern right now.
Japanese style zoning, allowing density to grow as population grows, allowing mixed residential and commercial appropriate to the density, with designated industrial areas, set forth in a way that neighbors are not allowed to micromanage others in an effort to protect property values. They set these formula at a national level. Codes still exist for safety concerns.
I also think that land value taxes are interesting. A five acre undeveloped downtown lot would be taxed based on the surrounding density and market potential, not based on its current development. This would encourage development where it was needed.
I see our current system as broken in a number of ways, especially in regards to suburban sprawl and the regulations enshrining that - minimum square footage, parking and garage spots, etc. And many suburbs are at a low enough density that they won't be able to afford to maintain their infrastructure over time without funds from more densely populated (metro or state) areas.
Having things cost more isn't an issue if the economy grows at relatively the same rate as the nation's money supply. For the economy to be considered inflationary, the money supply has to outgrow economic growth. The OP is making the argument (at least how I interpret it) that economic growth has been stagnant, and that the money supply hasn't been effectively put to work in the real economy. The US inflation rates are more a reflection of central bank activity vs the actual economy (which is deflationary).
If we were truly suffering from an aging society then where is all the inflation? Where are all the rich old people spending their money but not finding enough workers to do everything they saved their money up for?
It's probably because retirement has to be financed by the individuals themselves. Nowadays retirement means cutting spending today so that you can spend tomorrow. There are rich old people who aren't cutting down on spending but simply keep saving their wealth and there are poor old people who are cutting down on spending to build up savings, even though they are officially above the retirement age. This leads to a savings glut which is something you cannot fix by adding even more money into asset markets.
> however: the world we are living in is massively deflationary and even dramatic and innovative attempts to maintain (low) inflation are barely keeping us above water
That reflection isn't looking down at the surface of the water, but rather up at the air that we need to head towards to stop drowning. Monetary inflation is a large part of what's killing the middle class. All that offshoring was supposed to cause lower prices to compensate for decreased need for domestic labor. Instead a whole bunch of monetary inflation was induced to force everyone to keep working the same amount, at jobs that no longer exist. As long as the Fed continues with its maladaptive policy that is directly opposed to technological progress, most all productivity gains will continue accruing to the upper class.
I also would like to hear rsync's answer. But I'll make a guess:
The (world) population is no longer growing (much). But productivity growth hasn't stopped. The result is that stuff gets cheaper, that is, the same number of dollars buys more. That's deflation.
Worse, we've gotten to the point where many people have what they need - not necessarily everything they want, but most of what they need. (I'm not going to buy twice as much food if my salary doubles. I'm not going to drive twice as many cars. I'm not going to buy a house that's twice as big. I'd use almost all the money to pay off debt and to invest.) That makes it hard to create inflation in the basic stuff, because you can't make demand exceed supply.
>The result is that stuff gets cheaper, that is, the same number of dollars buys more. That's deflation.
It's more about the number of dollars out there. Fractional reserve means that a dollar saved leads to dollars being created. Boomers saving up for retirement meant lots of dollars being created. Boomers withdrawing and buying stuff means lots of dollars will be destroyed. Fewer dollars means dollars become more valuable i.e. deflation.
Because we are. Without taking action to curb it, the US will start to see deflation take hold. This is due to an overall aging demographic who are beginning to leave the workforce, an overall increase in savings/investment across the population, lowered rates of consumption, the younger demographic having less children, higher rates of education and on and on.
This has already begun to in both Germany and Japan. In the former, they've been able to curb things through government intervention. Japan on the other hand has really struggled.
On the contrary the price of up-keeping a household has increased dramatically.
30-40y ago it was not uncommon for a single pension to cover all expenses of:
- food
- car or two
- paying a mortage
- having 4 kids going to school
- other household expenses
- saving up money
/
Currently it is not possible. How in such a case do you still think we live in deflation times?
I would rather say that “some things” became cheaper due to technology advancements, but common things inflated so drastically, its literally impossible for young people to start families with sustainable life.
Low rates and reduction in consumer spending are rather signs of recession not deflation..
From 2008 crisis pretty much every country in the world is printing money like crazy. Its easy to print more digital numbers, its harder to gain actual land to inhabit ppl.
Thats why properties and land gain so much value lately and thats why its the biggest issue of them all - huge inflation in the housing department.
Don’t mean to butt in, but personally, the fact that I’m typing this on a piece of $300 hardware (phone) that would have cost millions in the 80’s, hundreds of thousands in the 90’s, and definitely over a thousand in the 00’s is a good indicator.
Been to the grocery store, ordered takeout or tried to buy a house lately? The prices of electronics (calculators, watches) fell consistently throughout the 70s which was a period of very high inflation. You can't cherry pick one sector.
It is very difficult to get a good number across all sectors. Despite my post, I’m not all that convinced we are in a deflationary period. The bell-weather asset for me would be Gold, and its price since I’ve been alive wouldn’t make me lean towards deflation.
If anything would, I suppose it would be the number of hours worked. That is, how much labor does it take to support a reasonable lifestyle. In my experience — and I’m an old geezer, so take this with a grain of salt — it seems like a lazy bastard can get by in this world a lot easier than 100 years ago. The degree of manual back-breaking labor that went into earning a dollar has decreased significantly. I don’t know how that would get figured in.
Gold prices aren't highly correlated with inflation so that would be a poor indicator. If you look at the actual historical data, gold isn't a very effective inflation hedge.
>> It is very difficult to get a good number across all sectors.
That's what cost of living indexes are for.
>> The bell-weather asset for me would be Gold
You probably mean to say gold futures or gold-based derivatives. There are more people who think they own "gold" than there is physical gold on this planet. Unless you have a bar in your hand, you own a contract tied to the price of gold, ie paper.
And despite the same technological improvements, gasoline is decisively more expensive. Technology is purely deflationary, so the situation with phone cost isn't very telling. What is more impactful is the cost of phone service vs median income across those decades, despite technology's deflationary forces.
Gasoline pump prices are highly impacted by taxes and regulations so those don't tell us much about core inflation or deflation. Look at the spot price of crude oil on international markets. The price today is still well below previous peaks.
I think computer hardware is one of the few things that decreased in price over time. The price of most other good and services has definitely increased since the '80s.
I came to this discussion ctrl-f'ing for "deflation" and while I got zero hits, your comment is close enough ...
I will abstract one level deeper and rephrase what you said as:
"Much of the financial system is highly dependent on economic growth."
There continues to be fervent discussion of the results of QE over the last 10 years and the results of various covid stimulus packages and how these things could be inflationary, etc., etc.
Some of this may come to pass - we may, indeed, find ourselves in geographic or temporal pockets of inflation - possibly very high inflation.
Make no mistake, however: the world we are living in is massively deflationary and even dramatic and innovative attempts to maintain (low) inflation are barely keeping us above water ...