Is a shortage of homes the number one problem with America’s housing market?
If so, does that mean that it’s the only problem that matters?
Is it all just Supply and Demand, Stupid? Or are you on team The Real World Isn’t Like Econ 101, You Idiot?
Every day is Groundhog Day in America’s housing discourse, which Fast Company called “the shoutiest debate on the internet.” But it’s not just the keyboard warriors on social media who are making it that way: mass media contributes by tending to report thorny, multifaceted housing issues in simplistic, either-or framings. Is Wall Street ruining the housing market? Is it NIMBYs, instead?
Much of the actual reporting that uses such framings, when you get beyond the headline, is good. Some of it isn’t. Regardless, the cycle of hyped-up pronouncement, then backlash, then backlash to the backlash, and so forth, is good for clicks.
In reality, the answer is almost always “Yes, and….” (And by the way, people who work with these issues on the ground largely already get this. There’s something about trying to solve real people’s real problems in the real world that forces you to grapple with nuance.)
The most interesting question is not “Does housing scarcity matter?” but rather, “In what way does it matter?”
I’d like to propose one way of thinking about it that I think is compatible with most YIMBY policy prescriptions, but also doesn’t stop at the simplism of the “build build build build build build build” crowd:
a) Not every problem associated with housing is directly a supply or scarcity issue.
b) Housing scarcity is real, and it tends to make just about all the other problems associated with housing worse.
Basically, housing scarcity is a force multiplier for other problems.
This makes perfect sense if you think of the housing market as a complex system. In a system of interconnected parts, when you break one thing, other things tend to start to break as well. The dysfunction puts more stress on them.
That applies to the myriad of ways in which people can struggle to find safe, decent, affordable, secure housing. Let’s explore.