The Housing Dilemma, and Trilemma

My own observation is that most of the time, housing/affordability is a quagmire of an issue, in large part because it combines personal impact with enduringly popular misconceptions.

I’m certainly not a policy expert here. Even without taking leave of reality it’s possible to venture very very far into the weeds on this issue. But for what it’s worth, I think the reality of housing policy is ultimately pretty basic.

If you want to counter rising local housing costs, you need more housing, in significant amounts. That’s pretty much it.

I think the housing conversation in most places tends to go everywhere but this basic principle because people don’t want to accept the basic trade-offs in housing policy. I would describe these as a dilemma, and a trilemma.

The housing policy dilemma is that we can treat housing as basic human need, which should therefore be as inexpensive as possible, or we can satisfy the preference of incumbent owners for house prices which keep up with or exceed inflation. But we can’t do both.

The housing trilemma is that housing can be any two of the following:

  • close to vibrant economic activity and service clusters
  • single-family detached construction
  • affordable for a broad range of income levels

But it can’t be all three.

As with many hard decisions, society usually tries to fudge these. I have long thought Lakewood is a relatively good compromise on that score; a mixture of compactness, with lots of two- or three-family houses, where residents can walk bike or drive to many services, and still have at least some semblance of detached housing and a yard.

Apparently, however, various trends (declining household size prominent among them I suspect) are now imposing more stark realities on Lakewood, too. People are talking more and more about housing costs.

Just like everywhere else I think popular preference is to look for scapegoats. People blame developers, speculators, and in particular “the wrong kind of housing.” I think most of this is bullshit, including in Lakewood. There’s a desire to believe that “luxury construction” makes prices high, yet cost is not really something inherent in housing. A million dollars won’t buy a collapsing heap in San Francisco, while a fine house may sit vacant in Cleveland because its market value is less than that of the copper in it.

If people want to bend the cost curve, I think quantity matters most. Much of the time, doing something meaningful about quantity means building up. (Especially in Lakewood.)

I would be skeptical of anyone who doesn’t center his or her housing affordability message on this.

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