Housing Supply (new discussion format)

Housing is a good source of long-term income, there are comparatively poor options, so prices go up compared to incomes. 

To quote @Ege Erdil [LW · GW] attempting to steelman:

there could be an interest rate effect - as interest rates fall, claims on future rents become more expensive so housing prices go up.

Tail wagging the dog. High productivity areas cause higher housing costs – just like in London.

The Bay Area example doesn't explain why lowering housing costs wouldn't increase productivity - it just shows that low housing costs isn't a necessary condition for it.

I'm not sure I agree that lower housing costs wouldn't represent a boost to productivity.

UK average household spend on housing is ~17%:

In London rents are a much higher percentage, somewhere between 45-50%. (Will update with the exact number and a source later.)

Understood as a pot of money that could otherwise be spent on other things, I'm not sure I buy that lowering housing costs wouldn't boost the economy.

Excessive housing costs create negative spillovers that hurt productivity in other sectors. If workers have to commute longer because they can't afford to live near work, that reduces their available working hours. If businesses can't attract workers because of high housing costs, that constrains their output. If consumer spending is constrained by high rents, that reduces demand (and thus production) across the economy.

It's possible that these spillovers aren't occurring – this comment doesn't constitute proof – but basic economics would suggest they are.

The UK housing crisis isn't just about productivity. Hold productivity fixed, and increase floor space, amenities, access to public transport, consumer choice in housing. Is this a UK we'd prefer to live in? Presumably yes.

We can still disagree about where to stack-rank it on our list of priorities, but that's not really what we're discussing.

The ONS's definition of household:

A household is one person living alone, or a group of people (not necessarily related) living at the same address who share cooking facilities and share a living room, sitting room or dining area. A household can consist of more than one family, or no families in the case of a group of unrelated people.

Higher housing costs mean fewer households. Children live with their parents for longer. Graduates move into HMOs because they can't afford a one-bedroom flat. Households growing at a slower rate than dwellings doesn't mean there isn't a supply constraint; it can often mean the opposite.

If I wanted to prove your point, the test would be whether the number of dwellings grew faster than the number of people, not the number of households.

why this, rather than lw dialogues?

Why does it having a productivity problem mean it doesn't have a housing problem? Seems like you want to say housing will not fix its productivity problem? (And that is a bigger problem, thus housing is not the biggest?)

What's the desired outcome of this debate?  Are you looking for cruxes (axioms or modeling choices that lead to the disagreement, separate from resolvable empirical measurements that you don't disagree on)?  Are you hoping to update your own beliefs, or to convince your partner (or readers) to update theirs?

I do not necessarily endorse my comments in this piece.

That's likely to need some explanation about why it's valuable to put such comments on LessWrong.  It's fine to put non-endorsed views here, but they should be labeled as to why they're worth mentioning.  Putting misleading or known-suspect arguments-as-soldiers on LW, especially mixed in with things you DO support, is a mistake.