A Placebo Named "Empirical Studies"

Steven E. Landsburg, author of the amusing piece "(Thats) What I Like About Scrooge", confirms what I've been extemporizing here on this blog regarding the deletrious effect of the governance-thru-economic-ignorance when it comes to the state of the housing market.

In his latest article titled "Is Housing Too Expensive? Blame the Government", ponders the effect that all forms of housing governance- zoning regulations, landmark & community boards, building deparments, the permit process, rent regulations, et al. and how two economists (Edward Glaeser of Harvard and Joe Gyourko of the University of Pennsylvania) came around to realize that "That is, zoning and other restrictions put a brake on competitive forces and keep housing prices up". (The link goes to their study)

I don't really think that their study is neccesary, regardless of the "hard" and "scientific" credibility that is psychologically attached to empirical data by intellectuals and policy makers. I find it blatently obvious that externally-imposed regulations of the market in both long and even short-term, tends to either increase the costs, decrease the supply or both. To prove their conclusions, they devised a sliding scale from 1-5 which rates only the factor of average time lost in the stages of regulation compliance with the local government, and using that as a very rough estimate of what that locality's housing cost will be in comparison to governments with stricter or more lenient regulations.

What is of interest to me is that perhaps people will now realize that there are consequences of varying economic impact in their meddling with the housing market, and it can be demonstrated with the help of the empirical data's placebo effect.

TANSTAAFL*

*Unless it's about affordable housing in NYC and you can't complete a sentence because your'e a blithering... what? Nevermind.

In regard to the state of housing in NYC, the policy wonks at http://housinghereandnow.org/index.html have declared:

Here’s what our elected officials can do TODAY to BUILD IT, FIX IT, SAVE IT:

Keep the Promise — use Battery Park City money to build and preserve affordable housing.

Guarantee housing for low- and moderate-income people in neighborhoods being rezoned.

Win back New York City’s right to determine our own rent laws

Provide permanent housing for homeless people living with AIDS

Support legislation to strengthen tenants rights to a healthy home through better inspections and tougher penalties.

Now would anyone* hold me to it if I didn't deconstruct every one of those bulletin points? Hey, BKmarcus did that too (not that I pretend to be his intellectual equal.)

*Yes, all three of you.

shameless promotion

For the 2, maybe 3 readers of this humble blog, I'd like to refer you to my latest other blog. Don't worry about my blogging fidelity, I'm still here to rant on anarcho-capitalism, books, and tech. I only need the other blog to vent my frustration over a certain matter which I can't seem to get rectified.

The other blog is here: http://antimarketeer.blogspot.com but don't let the URL fool you; the blog is titled:

"I hate the Newsday Marketeer"

Over there, I will follow up with my efforts to stop a local advertisement publisher from littering their crap on my private property. For the meantime I posted a mission statement detailing why I am against this practice from a legal and ethical standpoint.

Have a look-see, even if the words "Newsday Marketeer" don't mean anything to you.

Placing Aesthetic Desires Before Individual Needs

Those who advocate ridiculous zoning laws shall suffer the consequence of their folly.

If only people were bright to enough to grasp that over-zealous development would most likely not occur in the absence of zoning regulations.

Ever heard of the law of supply and demand?

So did developers, who are doing all they can to alleviate the current housing shortage, in stark contrast to those who have a NIMBY approach, or more like "Let them (the houseless) eat cake".

Developers and speculators can only make money when the supply is inadequate to the demand schedule. If the demand schedule cannot be met (when the average person can't/won't pay for the currently supplied good), it means that housing is expensive overall, and the longer the situation is not rectified, housing costs can only increase, which virtually guarantees the future housing output to be priced exclusively to the upper classes.

But you ask, surely the developers will have to lower their prices, in order to sell, right? Yes, its true that developers will have to finagle their way in order to sell somewhat-affordable housing, but that usually means the consequences of using cheaper materials, shoddy construction techniques and overall corner-cutting. Some developers will go as far as playing the legal-minefield, as does my friend (or is it acquaintance?) H.R. But most of all, you cannot then count on them to then build costly "contributing" buildings.

But the pity is that you, the neighborhoods are the victims of your own folly. By artificially limiting the density and heights of neighborhoods, you do nothing but drive prices higher and away from the demand schedule required for affordable goods. The current housing, and the newly available housing will stay out of the affordable realm.

If you thought just a little outside the box you would realize that developers can't make money when there is an oversupply of a good. They won't be incentivized to overbid on properties when they can't make their and their partner's required returns.

The elimination of zoning restrictions will maximize the housing supply to the optimal, and affordable level, while bringing up the standard of living to everyone.

But of course, the "central planners" out there who think they know best for all of us, end up doing more damage to the average wage earner than these "evil" "hasidic" developers, who in their zeal to make a living (what a horrendous crime!!), are helping alleviate the housing shortage and helping to keep lower housing costs.