Sunday, October 09, 2005
Locked out
With real estate prices skyrocketing
Many first-time home buyers can't afford a house in Bend,Oregon
Land use planning in Oregon has created a artificial shortage of build able land across the state, driving up land & housing prices.
Many first-time home buyers can't afford a house in Bend,Oregon
Land use planning in Oregon has created a artificial shortage of build able land across the state, driving up land & housing prices.
Comments:
For a moment, I thought you were going to say the lightrail was causing this increase in housing.
Real estate speculation is causing the wild jump in housing and this is going on ALL across the nation. If if were land use ordinances, the increases in home prices would be local but that is not the case. We are seeing housing prices increase 20-30 percent every two or three years all over the nation so it's not land use ordinances!
Real estate speculation is causing the wild jump in housing and this is going on ALL across the nation. If if were land use ordinances, the increases in home prices would be local but that is not the case. We are seeing housing prices increase 20-30 percent every two or three years all over the nation so it's not land use ordinances!
The skyrocketing cost of housing prices is due to 4 factors.
First is onerous regulations as blogged here and the link below documents.
Second is the federal reserve holding interest rates artificially low.
Third is FANNIE MAE buying up all those home loans that would otherwise be carried by the banks, so the banks don't care how sound the loans are.
Fourth is speculation made possible by the price run-up induced by the first three.
Read the National Bureau of Economic Research report here.
First is onerous regulations as blogged here and the link below documents.
Second is the federal reserve holding interest rates artificially low.
Third is FANNIE MAE buying up all those home loans that would otherwise be carried by the banks, so the banks don't care how sound the loans are.
Fourth is speculation made possible by the price run-up induced by the first three.
Read the National Bureau of Economic Research report here.
In much of California, the price runup in residential real estate is due mainly to speculation, and the fact there is little developable land left in the most desirable locations, e.g., new, "affordable" (a relative term!) single family housing can only be built at the far inland fringes of the major urban areas. Most of the remaining "close-in" open space in both the San Francisco Bay Area and Los Angeles region consists of steep hills and mountainsides (there are exceptions like large swaths of Western Marin and Sonoma Counties, but then the fresh water supply is a a major constraint).
Contrary to Anonymous, real estate speculation is NOT causing housing prices to wildly increase all across the nation. Cities that have little land-use regulation are not seeing such increases.
For example, despite a loss of 17 percent of its jobs, San Jose with its fixed urban-growth boundary has seen a 12 percent increase in housing prices in the last year. By comparison, Houston, which doesn't even have zoning much less an urban-growth boundary, has seen just a 3 percent increase in prices.
Economist Paul Krugman correctly observed that we have two Americas, which he calls the Zoned Zone and Flatland. The zoned zone, which is mainly on the coasts, has lots of land-use regulation and growth-management planning. Flatland, which is mainly in the interior, does not. As a result, fast-growing cities in flatland, such as Phoenix and Raleigh, NC, do not see rapidly rising housing prices.
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For example, despite a loss of 17 percent of its jobs, San Jose with its fixed urban-growth boundary has seen a 12 percent increase in housing prices in the last year. By comparison, Houston, which doesn't even have zoning much less an urban-growth boundary, has seen just a 3 percent increase in prices.
Economist Paul Krugman correctly observed that we have two Americas, which he calls the Zoned Zone and Flatland. The zoned zone, which is mainly on the coasts, has lots of land-use regulation and growth-management planning. Flatland, which is mainly in the interior, does not. As a result, fast-growing cities in flatland, such as Phoenix and Raleigh, NC, do not see rapidly rising housing prices.
