Commentary: Why Housing Remains a Social Justice Issue

Photo by Marcus Lenk on Unsplash

By David M. Greenwald
Executive Editor

This week the NY Times’ Ezra Klein brings home for me once again a key factor—that the American dream or a middle-class lifestyle remains out of reach for many, and it really centers again and still around housing policy.

He noted that in February 2020, right before the pandemic hit, The Atlantic published a piece on the affordability crisis that “was souring a seemingly strong economy.”

“In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars and child-care centers,” Annie Lowrey wrote. “For millions, a roaring economy felt precarious or downright terrible.”

Klein notes current and alarming inflation at 9.1 percent, and he also notes, “We papered over the affordability crisis with low prices for consumer goods, soaring asset values that kept richer Americans happy, subsidies for some Americans at certain times and mountains of debt: housing debt and student-loan debt and medical debt that kept the working class semi-afloat. But none of this addressed the core problem. For far too long, the prices of the things we need most have been growing far faster than inflation.”

Klein notes, “The political party that dominates this next era will be the one that shares the public’s fury and puts prices at the center of its agenda.”

He raises an interesting point and, without stating it, it is probably why the left is going to get buried here in the next election and maybe beyond that with working class people.  Although the right is really just as bad at this.

Klein writes, “If liberals look, they’ll find no end of ideas for bringing down prices across the economy.”

“I’ve been pulling my hair out about this stuff for years,” Dean Baker, one of the founders of the liberal Center for Economic and Policy Research, told me. “We can’t just accept markets as structured and then use tax and subsidy policy to make it less bad. A real big problem with progressives is we treat the market problems as givens rather than restructure those markets.”

Baker argues that the supposed division between market and government is a false one.

“The idea of a free market is nonsense,” he said. “I’ve had a lot of fun with libertarians who say they want the government out of markets. And I say, ‘Oh, you don’t want to have corporations anymore?’ Those are legal entities.”

Klein writes, “I’ve long liked Baker’s arguments for two reasons. First, they apply basic economic principles fairly, which is rarely true in politics. He’s relentless about deploying the arguments that are often used against government intervention on behalf of the poor to criticize ongoing interventions on behalf of the rich. Second, they slice through the ideological morass of markets versus governments to ask the more fundamental question: Who are our markets structured to serve?”

Housing, as Klein points out, is hard to build in dense cities which are dominated by blue Democrats.  That is “in large part because government has made it hard to build.”

“Blue places have chosen to make their housing supply inelastic — to use econ speak — and red places, by and large, have allowed housing markets to continue functioning and for supply to respond when there’s an increase in demand,” Jenny Schuetz, the author of Fixer-Upper: How to Repair America’s Broken Housing Systems, told Klein.

On the other hand, Klein points out, “drug prices are high because Republicans support expansive patent protections but won’t let the government use its purchasing power to bargain down prices, which is how virtually every other rich nation holds down costs. We’re granting monopolies on one end and refusing to use purchasing power on the other.”

Personally, I think Klein nails a lot of this, but misses a key component here.  Housing is the real barrier here.  Because while other consumer goods and increasing costs harm the working class and middle class far more than the rich, housing is the key to building wealth and by locking the working class and increasingly portions of the middle class out of wealth building, as we are harming their ability to gain real middle-class status.

We used to do this based on government lending policies—where government agencies would basically lock Black Americans out of white neighborhoods.

As the book Policing Chicago by Simon Balto notes, “The HOLC constantly gave black urban neighborhoods D rating, coloring them in red when drawing the maps of cities.  Following the lead, the FHA consistently drew red lines around those same neighborhoods (redlining them), marking them as high-risk and unsuitable for federally insured loans.”

It continues, “It similarly treated neighborhoods that were racially mixed or transitioning as high-risk, slapping them with C ratings and forecasting that they would soon be downgraded to the bottom.”

Simon Balto notes that these pieces of housing policy are central to understanding why white Chicago residents resisted Black migration so vociferously during the 1940s and 1950s.  In fact, Chicago was not alone, which paved the way for modern residential patterns as covered so eloquently in Richard Rothstein’s Color of Law.

Balto argues, “When black people moved into white neighborhoods, the official rating of those communities almost instantly dropped, which depreciated the value of white homes in the open market.”

While Shelley v. Kraemer put an end to official redlining in 1948, price inflation on homes has made residential segregation every bit as present—maybe even more so than it was in the 40s and 50s.  In 1950 the median home price was 2.2 times the average annual income, now it’s six times that average annual income and that doesn’t even take into account the growing disparity in average annual income and the fact that, for huge swaths of Americans, wages have stagnated or declined in real terms over the last half century.

Klein is right, “For far too long, the prices of the things we need most have been growing far faster than inflation.”

True.  But housing is access to the ability to generate real wealth and that has increasingly locked huge swaths of Americans out of wealth building and out of true middle-class America.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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18 Comments

  1. Ron Oertel

    Housing, as Klein points out, is hard to build in dense cities which are dominated by blue Democrats.  That is “in large part because government has made it hard to build.”

    That’s in large part because density itself makes it more-expensive to build.  Something generally has to be knocked down, first.

    Dense areas are ALWAYS more expensive than less-dense areas.  That’s why downtown Sacramento is expensive.  That’s why Hong Kong is expensive.  That’s why New York City and San Francisco are expensive.

    Really, you think that even if there were no restrictions (or very little), those areas would be cheap?  (Again, look at the coffin-size “apartments” in Hong Kong – you think those are those a “good deal”?)

    Because while other consumer goods and increasing costs harm the working class and middle class far more than the rich, housing is the key to building wealth and by locking the working class and increasingly portions of the middle class out of wealth building, as we are harming their ability to gain real middle-class status.

    Last time I checked, food, gasoline, utility costs, taxes, etc., are pretty important, as well.

    Blue places have chosen to make their housing supply inelastic — to use econ speak — and red places, by and large, have allowed housing markets to continue functioning and for supply to respond when there’s an increase in demand,” Jenny Schuetz, the author of Fixer-Upper: How to Repair America’s Broken Housing Systems, told Klein.

    So, if that’s what you believe, then it sounds like the “red” areas are the location that the working/middle class should pursue.  And, they are – in droves.

    Unfortunately (in regard to this argument), those are also the areas which have experienced the highest run-up in prices, lately.  So, that’s great for those who got in early, not so good for those who attempt to do so now.  (Well, until the housing market crashes, at least.)

    Actually, the argument itself is “confused”.  On the one hand, it argues for wealth-building via the housing market.  On the other hand, it decries that same result.

    Which is it?

    At what point did you start supporting the “free market” to accomplish all of your implied goals?

     

    1. Ron Oertel

      And in fact, what exactly is the goal?

      Is it “cheap housing in expensive areas, which then rises significantly in price to ensure social justice”?

  2. Ron Oertel

    Just happened-upon the following article.

    Sounds like your wish is coming true (cheaper housing in the most-dense areas).  Interesting, that one of the least-dense counties (Solano) is apparently the one that did not experience a drop in housing prices. Then again, Marin isn’t very dense, either – unless you limit your comparison to the areas in which building is actually allowed. In which case, it’s fairly dense.

    Median sale prices for single-family homes slid last month in all of the Bay Area’s nine counties except Solano, according to the association’s figures. Marin County’s median sale price in June was $1.8 million and represented a 14.3% decline from May — the biggest month-over-month decline in the Bay Area.

    Monthly median prices declined by 8.1% in Alameda, roughly 6% in San Francisco and Santa Clara, and around 5% in Contra Costa.

    https://www.sfchronicle.com/bayarea/article/Bay-Area-home-sales-dropped-and-prices-slid-in-17313110.php

    Just remember that age-old advice:  “buy high, and sell low”.  Can’t go wrong with that!

    We’re on the verge of the so-called “housing shortage” turning into a “housing collapse”. And the same people who have been complaining about high housing prices are the same ones who won’t (or can’t) take advantage of that collapse.

    Meanwhile, the institutional investors seek out these types of downturns. (But generally not in areas that are already expensive – except perhaps to build more luxury housing.)

    And the rich get richer – as it’s always been, and apparently always will be. (Future) money is made during downturns, not at the peak of markets.

  3. Richard_McCann

    Ron O

    On building in denser cities, the demand for housing in those areas is always higher which is why prices are higher and those higher prices cover higher costs of construction. Your statement reflects a simplistic one-sided look at the full equation.

    “Housing is the key to building wealth”: this statement has nothing to do with the cost of living, which is what you listed. Wealth building comes from owning assets, and the single biggest asset owned by the majority of households is their house. And locking younger households out of homeownership through housing control measures blocks them from build wealth in conventional way in the U.S.

    The red areas continue to fall behind economically because they don’t facilitate dynamic economies. The working class is moving there (not in droves, but in a trickle) because they can’t break into the areas where the economy is growing faster. You have economic growth and vitality backwards–people follow businesses, it’s not that businesses follow people. The manufacturing firms tried the latter strategy starting in the 1970s and it pretty much failed for both the states where they moved and the businesses.

    1. Ron Oertel

      On building in denser cities, the demand for housing in those areas is always higher which is why prices are higher and those higher prices cover higher costs of construction.

      Demand is related to jobs.

      Just to be clear, you’re claiming that construction costs are not higher, when they often have to remove existing buildings, and then build higher (including elevators, and whatever engineering goes into building taller buildings)?

      You’re claiming that building a one-floor house in Texas has the same underlying costs to construct as a Penthouse in Manhattan?  And that any difference in cost is due to “demand”?  Really?

      Your statement reflects a simplistic one-sided look at the full equation.

      Your statement is flat-out wrong – and not just “simplistic”.

      “Housing is the key to building wealth”: this statement has nothing to do with the cost of living, which is what you listed.

      I did briefly list some “cost of living” issues that low/middle-income Americans are struggling with.  You’re claiming that housing is not one of those costs?

      Since when does a place to live have to equate to “building wealth”? In vast areas of the country, that’s never been true.

      Actually, I have no idea what you’re claiming.  But whatever it is, I’m sure it’s wrong.

      Wealth building comes from owning assets, and the single biggest asset owned by the majority of households is their house. And locking younger households out of homeownership through housing control measures blocks them from build wealth in conventional way in the U.S.

      No one is “blocking” anyone from building wealth through home ownership.  In fact, many (including low/middle income folks) have built the most wealth in “red” states, lately.  Much more so than in “blue” areas.  Why is that a “problem”?

      The red areas continue to fall behind economically because they don’t facilitate dynamic economies.

      That’s a completely false statement.  Are you familiar with Austin, Raleigh, etc.? Do you view the states those are located in as “blue” states?

      The working class is moving there (not in droves, but in a trickle) because they can’t break into the areas where the economy is growing faster.

      The economy is growing faster in red states (such as Texas), not blue states (such as California).

      You have economic growth and vitality backwards–people follow businesses, it’s not that businesses follow people.

      Where did I say anything different?  In any case, it’s actually “both” – workers follow business, and businesses also follow workers (and lower costs). Businesses also prefer to pay their employees less (and be subject to less taxes) in red states. For that matter, workers don’t like high taxes, either.

      The manufacturing firms tried the latter strategy starting in the 1970s and it pretty much failed for both the states where they moved and the businesses.

      Those types of businesses moved to China.  They probably would have moved-out faster, had they been located in more-expensive areas.

       

    2. Richard_McCann

      Ron O

      You didn’t read my response closely. I said that the higher demand in denser areas justifies higher construction costs, exactly the opposite of what you misstated. Here’s the quote again: the demand for housing in those areas is always higher which is why prices are higher and those higher prices cover higher costs of construction.

      Again, David wasn’t talking about cost of living, but about wealth building. Your cost of living list was a non sequiter. Apparently housing value is the primary source of wealth among most households in the US, contrary to your unsubstantiated assertion: https://www.nahb.org/blog/2021/02/homeownership-remains-primary-driver-of-household-wealth/

      Growth controls in a community that prices out low income households blocks building wealth through home ownership–they are directly connected. Household wealth has risen fastest in those communities. That increases inequity which is a problem, unless you are of a political persuasion that actually doesn’t care about the welfare of others and is focused solely on oneself (of which there are many unfortunately.) https://mcubedecon.com/2017/01/16/why-increasing-wealth-concentration-is-bad-for-the-u-s-economy/

      Case in point: Austin, Raleigh, etc. are solidly “blue” areas within seas of red, and those states have used redistricting to close out those areas from influencing state policy. Red states are falling behind blue states economically:

      https://www.brookings.edu/blog/the-avenue/2019/09/10/america-has-two-economies-and-theyre-diverging-fast/

      https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-more-than-their-fair-share-here-are-the-receipts-column/

      Current red state growth is a short term response to the pandemic-induced recession when those states fell even further behind the blue states. They have a bigger deficit to make up so relative to a deeper hole they can look like they are growing faster.

      Actually, it’s innovation, not China, that is causing losses in manufacturing. Even in China manufacturing jobs are being hit: https://mcubedecon.com/2016/12/05/innovation-explains-manufacturing-job-losses-not-bad-trade-deals/

      1. Ron Oertel

        You didn’t read my response closely. I said that the higher demand in denser areas justifies higher construction costs, exactly the opposite of what you misstated. Here’s the quote again: the demand for housing in those areas is always higher which is why prices are higher and those higher prices cover higher costs of construction.

        Not sure what your “disagreement” is.  Yes – cost of construction is higher in dense areas – exactly what I said.

        Again, David wasn’t talking about cost of living, but about wealth building. Your cost of living list was a non sequiter. Apparently housing value is the primary source of wealth among most households in the US, contrary to your unsubstantiated assertion: https://www.nahb.org/blog/2021/02/homeownership-remains-primary-driver-of-household-wealth/

        The article referenced a lot of things (e.g., other articles).  Cost of living (including the cost of housing) is related to wealth-building, as well.  Income is likely the biggest factor.

        Growth controls in a community that prices out low income households blocks building wealth through home ownership–they are directly connected. Household wealth has risen fastest in those communities. That increases inequity which is a problem, unless you are of a political persuasion that actually doesn’t care about the welfare of others and is focused solely on oneself (of which there are many unfortunately.) https://mcubedecon.com/2017/01/16/why-increasing-wealth-concentration-is-bad-for-the-u-s-economy/

        That’s a complete false statement.  (By the way, it’s bad form to reference your own, inaccurate claims as evidence of anything.)

        Again, housing prices have risen MUCH FASTER in areas which allow a lot of growth, lately.  Austin housing prices, for example, have risen FASTER than anywhere in California.  
        Case in point: Austin, Raleigh, etc. are solidly “blue” areas within seas of red, and those states have used redistricting to close out those areas from influencing state policy. Red states are falling behind blue states economically:
        https://www.brookings.edu/blog/the-avenue/2019/09/10/america-has-two-economies-and-theyre-diverging-fast/
        https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-more-than-their-fair-share-here-are-the-receipts-column/
        Posting articles which don’t actually discuss what we’re talking about is both a specialty of yours, and irrelevant.

        Places like Austin have experienced much faster economic growth (and growth in housing prices) than anywhere in California, lately.  California has been losing both businesses and people to Texas.  Do you ever read anything other than the Vanguard?

        Current red state growth is a short term response to the pandemic-induced recession when those states fell even further behind the blue states. They have a bigger deficit to make up so relative to a deeper hole they can look like they are growing faster.

        Speculative nonsense.  Do you think Tesla and Oracle are coming back to California?  (I think there’s another one as well – HP?)

        Actually, it’s innovation, not China, that is causing losses in manufacturing. Even in China manufacturing jobs are being hit: https://mcubedecon.com/2016/12/05/innovation-explains-manufacturing-job-losses-not-bad-trade-deals/

        Right – it has nothing to do with lower labor costs, and a supportive government (e.g., manipulating currency).  I thought you said that you were an “economic expert”?

        As far as wealth-building, folks like you are advocating for those at the bottom to remain there, while they “wait” for housing prices to drop in areas that are already-expensive, and aren’t likely to experience much more “upside”. I find this to be an irresponsible position. Hopefully, those you purport to care about don’t take that advice. (Seems like most of them don’t, given the growth that’s occurred in places like Texas.)

        Maybe “average folks” have more sense than people with elitist views.

        Then again, maybe housing should (primarily) be viewed as a place to live. And maybe communities don’t “owe” outrageous gains to anyone, or should be expected to “provide” them. (This isn’t a sustainable goal in the first place.)

        1. Ron Oertel

          Note:  I neglected to note (highlight) that a portion of the comment above is actually a quote from Richard, not me:

          Case in point: Austin, Raleigh, etc. are solidly “blue” areas within seas of red . . .”

          It had no point or relevance, anyway. It’s as if someone wanted to point to Redding, and then describe California as a “conservative” state.

          The point being that there are better opportunities out there, for those who want to attempt to build wealth. (Or there were, up until the housing downturn.)

          This is also the reason that maybe half the people in Davis (and the Sacramento region) came from the Bay Area. Better opportunity, combined with lower costs.

          And yet, folks like Richard believe they can “change a community” (go back in time), well-after the ship has already sailed. Good luck with that. (Again, I’d see if Mr. Peabody’s “way-back machine” is available.)

      2. Richard_McCann

        Yes – cost of construction is higher in dense areas – exactly what I said.

        And as I pointed out, that’s a simplistic one-sided analysis that fails to acknowledge that demand also is higher which means that the willingness to pay is higher, generally sufficient to offset the higher costs.

        Cost of living is only peripherally related to wealth building–it only affects the rate of accumulation. Income isn’t the biggest factor–it’s asset ownership that drives wealth building. That’s why the wealthy get there by owning real estate and equities, not from our income.

        Please provide evidence that my statement that household wealth has risen fastest in communities with forms of growth control. Just making a speculative assertion doesn’t make it true.

        I said red and blue AREAS, not states. Austin and Raleigh are blue AREAS (cities). The surrounding red areas are much less economically vigorous. You’re the one who raised the point that they would be better off economically in those areas.

        Please provide a reference or citation that supports your speculative assertion that red states are growing faster over a longer term trend than blue states. I’ve already presented evidence that contradicts your assertion.

        I also presented my evidence that innovation is the primary driver of losses in manufacturing jobs. China is no longer gaining manufacturing jobs. Present your evidence that moves to China is the primary source of that job loss.

        Wealth building through home ownership does not involve buying a single house and then living there until one dies. People typically live in a house for 7 to 12 years (it’s gotten longer in California due to the financial incentives built into Prop 13) and then they move up to a more valuable house. When prices are driven up through growth controls in higher value communities, it blocks lower income households from being able step up to that higher value market.

        Regardless of your particular belief (which I don’t entirely disagree with), housing is the existing means of building wealth. If you have a proposal as to a feasible (both financially and politically) means of alternative wealth building, then suggest it. Otherwise you’re just offering worthless smoke.

        1. Richard_McCann

          And I’m not trying to return to a mythical utopia of 50 years ago. There were some valuable attitudes and cultural dynamics from the past that I am trying to foster, and that will be an effort that stakeholders within the Davis community will be attempting to recreate soon. We won’t need any help from outsiders unless they are invited.

        2. Ron Oertel

          And as I pointed out, that’s a simplistic one-sided analysis that fails to acknowledge that demand also is higher which means that the willingness to pay is higher, generally sufficient to offset the higher costs.

          What makes you think a simple statement noting that it costs more to build in dense areas was intended to be a complete “analysis”?

          Cost of living is only peripherally related to wealth building–it only affects the rate of accumulation. Income isn’t the biggest factor–it’s asset ownership that drives wealth building. That’s why the wealthy get there by owning real estate and equities, not from our income.

          Income and cost of living are directly related to the ability to purchase assets.

          Please provide evidence that my statement that household wealth has risen fastest in communities with forms of growth control. Just making a speculative assertion doesn’t make it true.

          Why would I provide evidence for your statement?  Isn’t that your job?

          I said red and blue AREAS, not states. Austin and Raleigh are blue AREAS (cities). The surrounding red areas are much less economically vigorous. You’re the one who raised the point that they would be better off economically in those areas.

          So, what’s your point?  Those are areas which have aggressively pursued growth, while also experiencing the largest run-up in housing prices.

          Please provide a reference or citation that supports your speculative assertion that red states are growing faster over a longer term trend than blue states. I’ve already presented evidence that contradicts your assertion.

          Look it up yourself.  Again, you’re slicing-and-dicing to claim that areas like Austin are “blue”. The political color that they are is irrelevant – they’re aggressively pursuing growth, including residential growth.  And yet, they have one of the FASTEST RISING HOUSING PRICES in the nation.  (Or they did, until the housing crash recently started again.)

          I also presented my evidence that innovation is the primary driver of losses in manufacturing jobs. China is no longer gaining manufacturing jobs. Present your evidence that moves to China is the primary source of that job loss.

          What?

          Wealth building through home ownership does not involve buying a single house and then living there until one dies. People typically live in a house for 7 to 12 years (it’s gotten longer in California due to the financial incentives built into Prop 13) and then they move up to a more valuable house. When prices are driven up through growth controls in higher value communities, it blocks lower income households from being able step up to that higher value market.

          Every time someone buys or sells a property (and moves), they lose a massive amount of money.

          It is true that this might still make sense for those able to take advantage of the capital gains exclusion.  This also assumes that the folks you’re referring to can afford a large house, via sufficient income.

          But again, the people who are looking for that “first house” are generally not trying to do so in relatively expensive areas in the first place.  On a broader level, that’s why California is losing population to Texas.  (I’m failing to see the “problem” with that.)

          Regardless of your particular belief (which I don’t entirely disagree with), housing is the existing means of building wealth. If you have a proposal as to a feasible (both financially and politically) means of alternative wealth building, then suggest it. Otherwise you’re just offering worthless smoke.

          You seem to think that it’s my responsibility to figure out how others should build wealth.  But if I was attempting to do it via housing (which probably isn’t the best method in the first place – especially in a declining housing market), I’d probably try some place like Texas – as already mentioned several times.

          I sure as hell wouldn’t be trying to do so in areas which are already expensive, and have limited upside.

          But truth be told, my first consideration would be where my JOB is located, assuming that they don’t offer full-time telecommuting.

          Anyone falling your implied advice (buy in an already-expensive area, without even having a job there or sufficient income) would be laughed out of both the real estate office, and a lender’s office. (And probably, an employer’s office.) And they’d be broke in no time, even if they somehow got through that. (Sounds like something that occurred in 2008.)

          We won’t need any help from outsiders unless they are invited.

          You’re neither a judge of that, or a gatekeeper.  Though your opposition to Measure J directly contradicts what you claim to support.

  4. Jean-Jacques Surbeck

    An interesting article, but one that left me confused. What is most important? A low cost of living that would allow working and middle classes to save enough to buy a house and thus embark on the real-estate ladder towards financial success? Sounds good. That was starting to be possible under Trump’s economy, but with Biden’s war on the energy industry leading to galloping inflation and a brutal surge in the price of gas, whatever savings the same working and middle classes might have been able to squirrel away have now evaporated. So where does the concept of social justice play any role in this dreary reality when the very government who – if I understand you correctly – should be leading the markets towards more affordable housing is in fact making sure through its suicidal policies that no one save the very rich can hope to jump on the real-estate success train? You are correct: the Democrats, who are (deservedly) already held responsible for this state of affairs, are going to suffer a devastating defeat in November. The two-thirds of Americans adversely affected by the downturn of the economy triggered by Biden’s idiotic decisions can’t wait for the country to change course.

    1. Ron Oertel

      There’s a reason it left you confused, as the goals in the article contradict themselves.  Near as I can tell, I summarized it in my earlier comment, above:

      And in fact, what exactly is the goal?

      Is it “cheap housing in expensive areas, which then rises significantly in price to ensure social justice”?

      I’d suggest that those who believe this is realistic might want to contact Stewie Griffin, to see if his time machine is available.  (Or, Mr. Peabody and his “way-back” machine.  Maybe his assistant Sherman will help.)

      Or, move to a location where housing prices are actually going up, such as Texas.  (But, wait until after the upcoming crash before doing so.)  Boise would work, as well.  (I’d pick Boise.)

      Turns out that everyone wants a house when prices are high, and no one wants one when they’re low. Sort of like the stock market. Buy high, and sell low.

      And some of those who missed-out when they had a chance (assuming they had a chance) harbor a lot of regret and anger. I’ve seen that in some people I’ve personally known.

      I do know someone who finally moved to northern Nevada maybe 3-4 years ago, after missing-out in the Bay Area years ago. And that person experienced quite a bit of gain, since moving. Certainly not something I would have predicted. But ultimately – unless they sell, it’s just a number on a computer, somewhere. And if they sell, they’d still have to live somewhere.

      But now, construction has ground to a halt in that area.

    2. Richard_McCann

      Jean-Jacques

      The run on the real estate market started during Trump’s administration and was already pricing lower income households out of the market. Davis has been increasingly out of reach since the mid-2000s, through four administrations. There’s plenty of blame to go around and the Trump administration set up this latest downturn with a series of unfortunate actions over the four years of incompetence. Biden might not have the best solutions but he didn’t get us into this mess either.

      1. Keith Olson

        There’s plenty of blame to go around and the Trump administration set up this latest downturn with a series of unfortunate actions over the four years of incompetence. Biden might not have the best solutions but he didn’t get us into this mess either.

        Biden’s energy policies certainly has caused much/most of the current problems creating higher inflation and higher costs for moving goods.  And because of Biden’s higher inflation interest rates now have to go up which will lead to a real estate downturn.

        1. Richard_McCann

          Keith O

          The inflation was initiated and fueled by these factors: a large unnecessary tax cut 5 years ago in the midst of an already booming economy, and then a large infusion of debt spending during a badly mismanaged response to a pandemic that could have been easily headed off instead of being denied. All of that excess cash in the economy has accumulated to eventually pressure demand. On top of that add the supply disruptions caused by the hurdles created through the mismanaged pandemic. Then add the bungled Ukrainian foreign policy for blatant political ends that signaled to Putin that the U.S. might not stand up to an invasion of Ukraine.

  5. Ron Oertel

    Richard McCann: “Cost of living is only peripherally related to wealth building–it only affects the rate of accumulation. Income isn’t the biggest factor–it’s asset ownership that drives wealth building. That’s why the wealthy get there by owning real estate and equities, not from our income.”

    I’ve literally never heard anyone claim that the ability to buy assets is unrelated to income and cost of living.  Let alone coming from someone who claims to be an economic expert.

    If there was an award for most outlandish claim put forth on here, this one would win the prize.

    As if they’re “handing out assets on streetcorners”, for free.

    Even stock options aren’t just ‘handed out” to everyone walking down the street.

     

    1. Bill Marshall

      I’ve literally never heard anyone claim that the ability to buy assets (built wealth?)is unrelated to income and cost of living.

      Add ‘inflation’, and would agree…

      As if they’re “handing out assets on streetcorners”, for free.

      Except, they are, as to tax credits/refunds, where they go to mainly upper middle class/rich, and those too poor to ‘file’ go without… Republicans and Democrats both “own that”… but both ‘package it’ as Covid relief and/or inflation relief, yet completely ignore those most impacted… in brazen attempts to garner votes… from the mainly upper middle class/rich… both at Federal and State levels…

      I’ll bet most reading this will take their credits, refunds, and “bank them”… we’re weird… we’re plowing them into charities… we have sufficient ‘assets’… we recognize others don’t… we’re weird…

      Particularly, as some would opine as we never should have had those assets in the first place, due to public employment…
       

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