>The durable solution is to increase housing starts by deregulation and financial incentives or public housing.
I think that there is a negligence of the economic conditions that face the construction industry in this and most similar arguments. Construction tends to be a pain point for costs, yet it is almost universally seen as a bad career. How can we reconcile this?
It's a boom-and-bust industry. Some years there is more work than people can handle, others they are struggling to get paid. Part of the solution should be to try to level out the cycles by building public housing when there is a downturn, and pulling back when there is not.
However, this is basically opposite of the cycle of populist demand for public housing, which tends to spike when prices are high and taper off when they go down. I don't have the deep knowledge of economics to make this argument robust, but what I think I'm aiming at is a sort of Keynesian approach to construction policy.
The inflation of labor and construction materials is reducing housing starts, but we must contextualize it -- what matters is not just the cost of construction but the ROI. Cost contributes to ROI but it isn't the only component.
If it was possible to build in the most high-value areas, the high ROI would justify private capital inflows despite the high construction costs. But planning in high-value areas is dominated by NIMBYs like Marc Andreessen lobbying their local government, so approvals happen in low-value areas where the construction costs dominate the ROI equation, which depresses housing starts.
But you are right that more should be done to reduce labor input costs for construction. That can only help the situation.
I think that there is a negligence of the economic conditions that face the construction industry in this and most similar arguments. Construction tends to be a pain point for costs, yet it is almost universally seen as a bad career. How can we reconcile this?
It's a boom-and-bust industry. Some years there is more work than people can handle, others they are struggling to get paid. Part of the solution should be to try to level out the cycles by building public housing when there is a downturn, and pulling back when there is not.
However, this is basically opposite of the cycle of populist demand for public housing, which tends to spike when prices are high and taper off when they go down. I don't have the deep knowledge of economics to make this argument robust, but what I think I'm aiming at is a sort of Keynesian approach to construction policy.