crisis of 2008-10 illustrated the immense dangers of a mismanaged housing market. In America during the early to mid-2000s irresponsible, sometimes illegal, mortgage lending led many households to accumulate more debt than they could sustain. Between 2000 and 2007 America’s household debt rose from 104% of household income to 144%. House prices rose by 50% in real terms. The ensuing wave of defaults led to a global recession and nearly brought down the financial system.
Traditionally politicians like it when house prices rise. People feel richer and therefore borrow and spend more, giving the economy a nice boost, they think. When everyone is feeling good about their financial situation, incumbent politicians have a higher chance of re-election. Malfunctioning housing markets also hit the supply side of the economy. The rich world’s most productive cities do not build enough new houses, constraining their growth and making them more expensive than they would otherwise be. People who would like to move to London, San Francisco or Sydney cannot afford to do so.
Other research, meanwhile, has found that housing is behind some of the biggest political shocks of recent years. Housing markets and populism are closely linked. Britons living in areas where house prices are stagnant were more likely to vote for Brexit in 2016, and French people for the far-right National Front in the presidential elections of 2017, according to research from Ben Ansell of Oxford University and David Adler of the European University Institute.
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This is about as basic as balancing a checkbook
If we could fix housing, education and health care we could move forward as a country and as humans.
What's the theory? (Or the conjecture, as Popper would've put it)
decommodify it
Banks really only want to lend against two thirgs - securities and houses, both if which are inflated in value. That money is created from nothing upon the loan itself. Vicious circle. scientificecon
True
In UK.
No shit Sherlock
Lower the house price, charge much higher property tax and return the tax to low income people.
The solution will undoubtedly be to integrate housing at $500k a piece into city centers instead of doing it at 1/10th price using public transportation infrastructure. Can’t wait.
Addiction, mental health, and crushing taxes are the root causes, housing is a collateral symptom not a cause.
People are forgetful.
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