Thursday, January 27, 2005

Eliminate HUD and lower the cost of housing

The New York City Housing Authority complains that the federal government is providing "$50 million less than what the agency needs." NY Times.

(1) Housing should be a local issue and not a federal issue. Eliminating the entire federal Department of Housing and Urban Development would help reduce the budget deficit by $31.3 billion.

(2) Housing can only be made more affordable by increasing supply or by reducing demand. Basic economics.

(3) Housing vouchers make housing less affordable because they increase demand by increasing the amount of rent that voucher recipients can afford to pay. Voucher recipients wind up bidding against each other for a fixed supply of housing resulting in higher prices.

(4) The economically sensible way to help poor people is to increase supply, which can easily be done by changing zoning laws and reducing other regulatory impediments to residential construction. And the best part of this solution is that it doesn't cost the taxpayer any money at all.

9 comments:

....R.A.J.A.... said...

wow, wonderful post!

Roberto said...

Ok....you have made a point...Now, let’s find a way to change the system. I read recently a book that was written in the 70´s. The Third Wave by Alvin Toffler. He and his wife put forth ideas then that are applicable today. The age of technology is here. There is a way to improve our lives through the technology that is available and yet not lose our freedoms.

mikeca said...

HUD and housing vouchers are a minor influence on the low-end rental market. The idea that without these vouchers the free market would solve this problem is debatable. The cost of building new housing sets a minimum rental price, and if that is too high for poor people, then the free market can do little to help them. In this case the “free market” solution is illegal shantytowns, like you find in much of the 3rd world. Is this the solution you are proposing for the US?

If you want to reduce the cost of housing in the US, you need to eliminate the real government subsidies, like the tax deductibility of home mortgage interest, Fannie Mae and Freddie Mac. The problem is that home ownership is very high in the US, so this would hit most Americans hard and is therefore unlikely to be politically acceptable to either party.

The other thing to keep in mind is that the vast majority of private savings in the US is in home equity. Many Americans will be relying on this for part of their retirement income.

Gothamimage said...

Libertarian girl cannot be serious. She is making a hypothetical argument that will have zero chance of ever happening.

31 Billion dollars sounds like a lot, but it is not. It's just a few months of Iraq Occupation walking around money.

The point of HUD is NOT to help poor people. The point of HUD is to help developers who help politicians.

Follow the money and you will see what I mean.

I think Libertarian Girl knows this. She is smarter than me.

Also, zoning laws are constructed precisely to KEEP OUT poor people from the living areas of non poor people.

You know that!

Scott said...

Several correct points were made above.

"(3) Housing vouchers make housing less affordable because they increase demand by increasing the amount of rent that voucher recipients can afford to pay. Voucher recipients wind up bidding against each other for a fixed supply of housing resulting in higher prices."

Increasing the amount of rent that recipients can pay also provides an incentive for the construction of more and better housing. I doubt it's the right incentive, but it is worth noting.

I may be wrong, but I think Libertarian Girl is equating "price" and "affordability" in her economic analysis, when the two terms are not necessarily synonymous.

Engineer-Poet said...

One correction to what mikeca said:  Housing can easily rent for less than the cost of construction if it is in an area people are fleeing, like much of Detroit.

mikeca said...

Engineer-Poet said “One correction to what mikeca said: Housing can easily rent for less than the cost of construction if it is in an area people are fleeing, like much of Detroit.”

This is true, but it is not a sustainable situation. Housing being rented very cheaply because no one wants to live in that area will not be properly maintained, as the example of Detroit illustrates. There also are areas of the country that simply do not have undesirable locations where housing rents can fall so low, or when they do, the local governments declare them slums and tear them down.

Me!! said...

Find great deals on eBay with the misspelledauctions.com search engine

Misspelledauctions.com


Awesome

mamdigs said...

this is one of the funny things
free sex pictures
free sex pics
free sex videos
free sex movies
free sex clips
free sex vids
free sex photos
free sex mpegs
free sex mpgs
free sex galleries
free sex thumbnails
free sex pix
free sex toons
free porn pictures
free porn pics
free porn videos
free porn movies
free porn clips
free porn vids
free porn photos
free porn mpegs
free porn mpgs
free porn galleries
free porn thumbnails
free porn pix
free porn toons
free adult pictures
free adult pics
free adult videos
free adult movies
free adult clips
free adult vids
free adult photos
free adult mpegs
free adult mpgs
free adult galleries
free adult thumbnails
free adult pix
free adult toons
free teen sex pictures
free teen sex pics
free teen sex videos
free teen sex movies
free teen sex clips
free teen sex vids
free teen sex photos
free teen sex mpegs
free teen sex mpgs
free teen sex galleries
free teen sex thumbnails
free teen sex pix
free teen sex toons
free asain sex pictures
free asain sex pics
free asain sex videos
free asain sex movies
free asain sex clips
free asain sex vids
free asain sex photos
free asain sex mpegs
free asain sex mpgs
free asain sex galleries
free asain sex thumbnails
free asain sex pix
free asian sex pictures
free asian sex pics
free asian sex videos
free asian sex movies
free asian sex clips
free asian sex vids
free asian sex photos
free asian sex mpegs
free asian sex mpgs
free asian sex galleries
free asian sex thumbnails
free asian sex pix
free lesbian sex pictures
free lesbian sex pics
free lesbian sex videos
free lesbian sex movies
free lesbian sex clips
free lesbian sex vids
free lesbian sex photos
free lesbian sex mpegs
free lesbian sex mpgs
free lesbian sex galleries
free lesbian sex thumbnails
free lesbian sex pix
free mature sex pictures
free mature sex pics
free mature sex videos
free mature sex movies
free mature sex clips
free mature sex vids
free mature sex photos
free mature sex mpegs
free mature sex mpgs
free mature sex galleries
free mature sex thumbnails
free mature sex pix