In my newly published book, "Nowhere to Live: The Hidden Story of America’s Housing Crisis," I chronicle how one failed government policy after another has contributed to one of the worst housing crises in our nation’s history. What we don’t need is to double down on failure.
Ah, this is an opinion piece that is really a "buy my book" pitch. Ok, fair enough -- as long as nobody mistakes the article for what it really is.
Cycles are called that for a reason -- they cycle. There are hundreds, even thousands of them in the natural world. We have tides as the result of the Moon orbiting the Earth and when that orbit coincides with other natural cycles we get "higher" and "lower" tides than we otherwise would. Both solar and lunar eclipses are not only normal they can be calculated with extreme precision in advance because they are celestial phenomena and thus, absent some huge comet or similar smashing into either (in which case we have bigger problems than when the next eclipse might be) we can plan to be there and view them well in advance -- indeed, years or even decades or more in advance.
But human-influenced cycles are a different thing because while they are tied to inescapable physical facts there is also an unknowable human element. Humans have many dynamics we cannot exactly quantify -- fear, greed, religious beliefs, crowd effects (e.g. "influencers") and more. The interactions between all these things are deterministic if you know all the inputs that will occur but that's unknowable -- for example 10 years prior nobody knew Kennedy would be shot while riding in a car just as nobody knew Lincoln would only see part of his last theater production.
Back in 2000 we bailed a lot of people out with preemptive credit emission fearing a catastrophe when the year rolled over due to 2-digit year counters in a lot of older software. That catastrophe never came but the credit emission was not taken back out. People started to notice and exert their veto of the obvious favoring of certain folks in the "higher economic strata" over others by explicit policy. Whether they identified it that way or not doesn't matter; what does matter is that said veto was expressed in the form of fewer children being conceived and born to those women who had the intellectual chops to think about this stuff. We then doubled-down on this pattern of behavior within the government twice more; once in 2008 and again in 2020. The veto continued and spread, now reaching the original children from that 2000 time period who are also choosing not to make as much of themselves as they otherwise could from an economic perspective because they perceive that their effort will be stolen -- that is, they won't get to keep any material part of it and neither will any children they make so why put in the effort?
The "migrant" nonsense is of course part of this -- add to that the "go ahead and get stoned, live on the street, rip off every store in the city because nobody will jail you and the city and state will tax you so they can all do this and you're forced to pay for it" garbage -- and much more.
It doesn't matter if you agree with either of these group's position or not; those two vetoes have no override possible. You can only change people's perceptions through your expressed action as politicians and the citizens' collective willingness to allow those policies to be undertaken and maintained.
One of the effects of these policies has been to wildly accelerate the cost of housing. Its not just the purchase price either; both insurance and property taxes hit everyone whether they buy or rent and both have, in many areas, accelerated at an outrageous rate. Since insurance has as a significant part of its price the cost of replacement whether by substitution or reconstruction until and unless prices in general come down neither will insurance costs.
Don't kid yourself on this: That's going to happen.
Probably not tomorrow, but it will happen. Why? Because we've gone from a 2.2% rate of increase in the non-institutional working-age population in 2000 to about 0.55% today, and at this rate of change, which is nearly linear across those 24 years, it will go negative within the next five to ten years. In other words that veto has wiped out 75% of the working-age population growth rate, that veto is centered in the >100 IQ population of women, nobody has lifted a finger in either political party to address the reasons that veto is being issued and it is an absolute certainty that the working-age population will begin to contract within the next ten years and the largest percentage contraction will be in those with a >100 IQ. It obviously requires at least seventeen years to begin to reverse (since the definition of that population is 16+ persons not in an institution such as prison or a nursing home) so even if you were to stimulate a huge baby boom through changes in attitudes right now it would be nearly two decades before the first economic impact of that would reach the age of persons contributing directly to the economy and tax rolls.
Many people argue that as boomers die (and we're on the leading edge of that, which is inevitable simply because we all eventually do) that houses will simply be passed on the next generation via trusts and similar. Perhaps in some cases, but does it matter if the house has a $20,000 per year property tax bill associated with it and is three times the size of what a now-20something year old person needs? Not when that property tax bill is a third of their income and in addition the insurance and utility (operating) costs are wildly higher as a result as well -- they'll sell it for whatever it can bring because they have no choice (and it would be foolish not to, frankly.)
This is an inevitable result of the policy decisions made more than 20 years ago and continued all the way to the present day and thus we cannot avoid it. The market can and will pretend it won't happen for some period of time but nobody has a time machine and we can't go backward and change those decisions, thus we also can't change the outcome. Attempting to game those economic events in 2000, 2008 and 2020 have all baked into the cake an enormous valuation bubble and the two levels of veto, one resting with women of 100+ IQs and the second resting with intelligent young people in their career choices, also of 100+ IQs can only be changed by altering their expectations for the future which are predicated on what they see in front of them with their own eyes. A woman's capacity to make that decision more-or-less expires by her 35th birthday in that by then you've either got the kids you want or you're unlikely to have them at all; that is, there's an approximately 15 year period of time during which that veto can be rescinded by any specific woman -- and that's it.
Thus we have starting now and increasing over the next five to ten years supply of housing in enormous volume is going to come into the market. What's worse is that there is real risk of a vicious spiral because if we, as a nation, continue to offshore work and step on the hands of those younger people trying to climb the ladder then the capacity to obtain tax revenue for services we believe are essential may well come up short enough that even basic requirements -- like water and sewer, fire protection and similar -- go unfilled.
Both sides of the aisle are refusing to address this and both sides are equally culpable for causing it. If you go back to 2000 add up the years -- 8 of GOP, then 8 of Democrats, then 4 of the GOP and finally 4 of Democrats. That looks pretty equal to me so the partisan finger-pointing is foolish; nobody has had any interest in attenuating this for a whole host of reasons, both political and financial.
Attempting to maintain the ridiculous valuation bubble will not work. Prices have to come way down -- that bubble has to be popped, including the tax and insurance aspect of it, and young people must be convinced that doing so is not an aberration that will be immediately reversed but that reason will be maintained not just through enough time to create and raise children but during their lifetimes as well so they have reason to believe their children will have an equal or better life than they have.
One of the defining differences in intelligence is that you need roughly a 100 IQ to be able to understand and express, in your daily life, time preference. That is, to foresee tomorrow and plan for it, including foregoing immediate desires today. Those who can do that will exert a personal veto nobody can override, those who can't statistically will produce children who cannot maintain or build our infrastructure, nor meaningfully contribute to the tax base and ultimately the veto by those who can do both will collapse our government and society if the policies that lead those 100+ IQ people to issue that veto are not changed.
That we have 20 years of rough sledding ahead cannot be avoided.
Collapse can still be avoided but we must act now because exponential events work both directions and it is entirely possible to get far enough behind the curve that in the coming 20 years, even if you've changed it, too much breaks and society collapses before you can turn the corner.