Economics Thread

chop2chip said:
The price for homes just went by $10,000. Congrats to those who already own a home as you’ll be paying more in property tax once your local taxing authority accounts for this in the appraisal.
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eh...it is a basic result of micro that subsidy and tax incidence depends on relative elasticities
 
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chop2chip said:
Demand is elastic for buying home, no?
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in the short-run demand is probably more elastic...in the long run supply

a better designed subsidy would focus directly on adding to supply rather than on sales of starter homes

even better would be for state and local governments to simplify permitting and make it less costly to add to supply...but that runs into nimby
 
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Economists in the Biden administration are calling for more aggressive federal action to drive down costs for home buyers and renters, taking aim at one of the biggest economic challenges facing President Biden as he runs for re-election.

The policy proposals in a White House report being released on Thursday include what could be an aggressive federal intervention in local politics, which often dictates where homes are built and who can occupy them. The administration is backing a plan to pressure cities and other localities to relax zoning restrictions that in many cases hinder affordable housing construction.

That recommendation is part of a new administration deep dive into a housing crisis, decades in the making, that is hindering the president’s chances for a second term. The proposals, included in the annual Economic Report of the President, could serve as a blueprint for a major housing push if Mr. Biden wins a second term.

The report includes a suite of moves meant to reduce the cost of renting or buying a home, while encouraging local governments to change zoning laws to allow development of more affordable housing.

“It’s really hard to make a difference in this space, in this affordable housing space, without tackling land use regulations,” Jared Bernstein, the chairman of the White House Council of Economic Advisers, said in an interview.

Mr. Bernstein added that administration officials believed many local leaders were encouraging a bigger federal role in zoning reform — which can help override objections from local groups that oppose development. “I feel like we’re kicking through more of an open door now than we ever have before,” he said.

The report is full of statistics illustrating why housing has become an acute source of stress for American families and an electoral liability for Mr. Biden.

The administration has acknowledged that it has limited power over local zoning rules, which tend to dictate the design and density of homes in particular neighborhoods. Most of the president’s recommendations for expanding supply involve using the federal budget as a carrot to encourage local governments to allow more building — including adding low-income housing and smaller starter homes.

https://www.nytimes.com/2024/03/21/us/politics/biden-housing-costs.html

as a general strategy this makes a fair amount of sense
 
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Better strategy is to usher in another economic crisis to force interest rates back to zero.

Or drastically cut spending (ha!)
 
btw any plan that successfully stimulated supply and lowered the price of housing would create a whole new set of political headaches...it would not be popular among the people who already own houses
 
Fun fact for the idiots on the left.

If we co fiscated the wealth of every billionaire in America, and converted it to cash of its current value, we could fund our federal government for almost 8 months

Nothing matters until spending is slashed
 
California produces the biggest stream of billionaires of any state or country and confiscates a good chunk of their income. Pretty nifty trick. But other states shouldn't try it.
 
nsacpi said:
California produces the biggest stream of billionaires of any state or country and confiscates a good chunk of their income. Pretty nifty trick. But other states shouldn't try it.
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That probably explains why they are also broke and lead the country in homeless and poverty
 
Looks like we can add poverty rates to murder rates, life expectancy and per capita GDP to the list of basic metrics where the GAP between blue and red states has been getting even more favorable for blue states.
 
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