Quote:
Originally Posted by Skyguy_7
Left of Center? Might as well change your name to Right of Center!  |
Haha ouch! My post did come off as quite economically neoliberal, so perhaps I do deserve that
I consider myself to be politically liberal, but I do have a Finance degree from UIC and have a fair understanding of market dynamics. I am very much in support of affordable housing, but it needs to be done in a way that promotes it from a market perspective. Fighting the market is costly and typically does not work. If you want prices to drop or stabilize, you can either reduce demand or increase supply. Pilsen is a great neighborhood with an excellent location close to the Loop, plenty of amenities, great housing stock and intact urban fabric. Keeping people out is not a viable option. So the next step is allowing developers to build as densely as possible in order to create enough supply to absorb the demand and put a buff on prices. Landlords will be less willing to sell their properties to developers or evict tenants in order to raise rents if the ROI of doing so isn't worth it.
Anything that makes new development more difficult, such as in this case with demo fees, or curbing new development (such as the parking lots by 18th and Racine that have basically been left to sit idle by former alderman Solis), by definition restricts supply. Restricted supply but unchanged demand will cause a rise in prices, and the way around being unable to develop empty lots or demolish abandoned buildings is to evict existing residents, renovate and lease out to the people who are willing to pay more, which is within the right of the current property owners to do. The best way to protect existing residents is to have the people that would displace them become neighbors instead.
The only other other option is to entirely remove the free market from the process, such as creating government funded housing. Public housing has not worked well in the past, due to high levels of disinvestment and lack of mixed income communities (basically wholesale warehousing of the poor by the CHA), and thus the political appetite for this route is pretty low.
The argument basically boils down to, how do we best have affordable housing in the city? The answer, in my opinion, is to allow as much development as possible to soak up demand and to moderate prices. If we have a glut of housing, housing prices will come down.
Quote:
Originally Posted by the urban politician
Common sense prevails over political leanings
I think we all understand basic economics, and come to the conclusion that some of the bone-headed ideas that these Aldermen come up with just.....make no sense when you think about it |
Its not even political in my eyes. The United States in general is short on housing, which is why prices for new homes are so high (in addition to the crazy high costs of commodities such as lumber). We have been underbuilding homes since the Great Recession, and hopefully this begins to get corrected over the coming years.
Quote:
Originally Posted by SamInTheLoop
Yeah, it's not even a left or right thing.
Measures or market factors that deter supply/increase the cost of it will result in increased prices, ceteris paribus.
It's just acknowledging reality.
There's all sorts of policy details to be considered underneath, however top line, policymakers that want to do something to improve housing affordability should have a guiding principle of ensuring the totality of measures do not deter aggregate supply at the end of the day - and if possible, actually encourage it.
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Exactly. Econ 101.
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