Comment by rssoconnor
2 days ago
I don't actually know anything, but I've been wondering lately: is higher house prices simply a consequence of Baumol's cost disease? If so, then there is kinda nothing we can do about it, right?. Higher house prices is simply a consequence of improved productivity elsewhere, and thus it is necessary to spend a larger fraction of one's income on housing.
Higher house prices in the US are a consequence of literally every major US metro area having a shortage of housing (https://www.fanniemae.com/research-and-insights/perspectives...). There's no mystery here, just that a lot of people decided to shoot themselves in the foot starting in the 1970s by putting more and more zoning and permitting limits on new housing construction.