tag:blogger.com,1999:blog-10505181.post115651635609680085..comments2023-11-15T03:23:00.712-05:00Comments on lettuce have peas: when logic need not applyiceberghttp://www.blogger.com/profile/00092220167956120749noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-10505181.post-1161266879804727792006-10-19T10:07:00.000-04:002006-10-19T10:07:00.000-04:00Nice smackdown.Yeah renovation is driving the midd...Nice smackdown.<BR/><BR/>Yeah <EM>renovation</EM> is driving the <EM>middle class</EM> out. So when the real estate market weakens (and perhaps the overall economy), pundits will be gushing about how well the middle class is doing and delighted that NYC is more affordable?<BR/><BR/>I am not holding my breath.<BR/><BR/>It doesn't matter what the subject is, idiots will conflate or juxtapose cause and effect, symptons and disease.<BR/><BR/>Just the other day on Mankiw's blog, the usual debate of why people are "poor" came up. Most people agreed, stay in school and avoid teenage pregancy. But of course at least one idiot insisted that the immoral and stupid behavior was caused by poverty, not the other way around.CaptiousNuthttps://www.blogger.com/profile/14440029537418230507noreply@blogger.comtag:blogger.com,1999:blog-10505181.post-1156997577009592042006-08-31T00:12:00.000-04:002006-08-31T00:12:00.000-04:00Jonathan,I did not mean to be disrespectful to you...Jonathan,<BR/><BR/>I did not mean to be disrespectful to you, nor your professional job, and I apologize for my prior uppitiness.<BR/><BR/>I still do think that you don't have a grasp of fundamental economics, and that is what "gets my goat", so-to-speak.<BR/><BR/>I say this because you make economic arguements that fall short of grasping the causal factor within. For example, you state that the reason why the middle class is disappearing because their incomes are not rising as fast.<BR/><BR/>I'm no formal student of logic, but I cannot fathom how you jump from recognizing a relatively lower wage increase rate as the primal, causal reason why the middle class are "fleeing" the city.<BR/><BR/>Your argument suffers for a few reasons;<BR/>a) it does not explain why an affordable housing stock does not truly exist in the first place<BR/>b) why a differential in wage increase rates should have a more than marginal effect upon housing prices<BR/><BR/>Take automobiles for example; does the wage increase differential have an effect upon supply of affordable cars?<BR/><BR/>Of course, the fundemental difference between cars and land is that in the former case, "they aren't making much more of it". But in truth, we havent come close to not having enough land for humanity-- and this is because of the arbitrary limitations that NYC and other "progressive" megapolis's have in place. (I'd rather not get into normative discussion of why I'd prefer Houston to Brasilia.)<BR/><BR/>The second unwarranted assumption you make is that "renovation and revitalization drive prices higher".<BR/><BR/>Sorry, but that not how prices work. Price is a function of demand, and which ultimately determines what your costs will be (for the moment leaving out cases of quickly-adjusting entrepreneurial error). <BR/><BR/>So if urban renovation is to occur, it is because the price has already moved up, and some entrepreneur has spotted the opportunity to take advantage of that differential between old valuations and the newer higher one, while of course he is at risk at misjudging the situation.<BR/><BR/>I know its more complex than this, and I do have a lot more to say on this subject, but I only wanted to bring out the point that while you are probably the one of the best out there in assessing the general price level of real estate properties, your grasp of what drives those fundamentals seems lacking, and can't be explained further than giving a correlations of historical trends.iceberghttps://www.blogger.com/profile/00092220167956120749noreply@blogger.comtag:blogger.com,1999:blog-10505181.post-1156967379474357462006-08-30T15:49:00.000-04:002006-08-30T15:49:00.000-04:00Lettuce Alone - Your post seems to be on some othe...Lettuce Alone - Your post seems to be on some other tangent not covered in my 2 posts. How can rising prices not push people out of the market, especially middle class if their incomes are not rising as fast? Thats what the posts are about. There is no inference of a central planning fairy as you call it anywhere. I have however, discussed New Urbanism at length in Matrix. But not in either of these posts you link to. Revitalization means renovation, which means higher rents and sales prices, which means higher retail rents, which changes services, which means a different demographic. Your comment on my blog represents an opinion you feel strongly about and you make some great points, if only thats what I was talking about.Anonymousnoreply@blogger.com