President Biden: The NEW one and only politics thread

"We're" not building enough housing? Who is included in "we"? How does that work? We all get together and decide what the optimal number of homes is, and then chip in and build them?

There is no magical "right" amount of housing. All of those links start from the propostion that housing has gotten expensive, therefore there is a shortage (i.e. -- if only "we" found a scheme to increase the supply of housing. ... one of them goes on about housing vouchers. ... -- it would bring prices down). The world doesn't work that way, and to the extent we now treat it that way, we actually keep creating our own problems, by trying to design things the people with the magical solutions don't even understand.

You didn't answer my question about why housing has become unaffordable.

If there is a way to build homes and profit from it (which would increase supply), there is all the incentive in the world to do it, no? You'd have home builders building homes hand over fist.

The reason that hasn't happened is that a much more powerful force has distorted the housing market. ... a monetary authority that has destroyed the debt markets, intervenining directly in the mortgage-backed security market (so directly in the housing market) by buying up trillions of dollars of mortgages with money it created out of thin air (overpaying for those mortgages by definition, because they were buyers at any price. ... a whole other problem and discussion that we all have to pay for). That keeps mortgage rates artificially low, and it has juiced demand for homes. That is what has sent housing prices relentlessly higher. Their manipulation of the debt markets overwhelms market supply and demand. ... by sending demand artificially higher on the back of mispriced debt markets.

How that played out over time is why housing became so unaffordable and people now have settled into a "shortage" narrative. The demand for housing is elastic. Given the distortion they created, we actually don't really have a housing shortage. ... We have JUST the amount of housing you'd expect in the environment we have now created (by trying to design things rather than letting price discovery send signals to the market).

Prices went up due to all of the artificial demand they have unleashed. ... and at the increasingly inflated prices, millions of people are priced out of buying a home. ... which crossed a threshhold that has given home builders much less incentive to build new homes (which they won't be able to sell, because the people left without homes can't afford them -- i.e. the unaffordability that translates to "shortage" to some people).

It's not the simplistic, "We" are not building enough homes. That doesn't say much of anything. People need to consider WHAT has created a U.S. where homes are unaffordable for so many people. It's the reason and the answer to how to unfuck up the housing market.