Homelessness was on the rise even before the pandemic

I'm sorry, what does that even mean? Over what exact timescale exactly?
Is that some trick of calculus?
You do realize that it's possible to still be adding more people than were added last year and for the "population increase rate" to decrease?

quick example to illustrate:
10000 people
increase 10 percent
11000 people (an addition of 1000 people)
increase 9.5 percent
12045 people (an addition of 1045 people)


or another example
1988 - 758 people
1989 - 834 people (10 percent increase)
1990 - 1000 people (20 percent increase)
1991 - 1300 people (30 percent increase)
1992 - 1536 people (20 percent increase)
1993 - 1716 people (10 percent increase)
1994 - 1802 people (5 percent increase)

Yes, you could say it is decreasing, but only if you look at the very most recent interval of years, which becomes relatively meaningless.

 

I'm aware of the relevant arithmetic. Population is still increasing, but the rate of increase is slowing so rapidly in most countries -- in some it is actually decreasing -- that demographers are predicting global population will peak in this century and then go into decline.

 

Well, around where I live, over the last 20 years I've seen open land being cleared and lots of new home developments being built.

Maybe the issue is the population growth relative to growth in the economy. If the rate of population growth keeps exceeding a certain ratio relative to growth of the economy, it's possible the negative impact of that could be cumulative.

That means, even if the rate of population growth is slowing a little bit, things could still be getting worse, if those rates of population growth were high in the first place.

Another issue might be in more absolute terms, with the US running out of room around the traditional hubs of economic activity, and for complex reasons it might not be easy for new hubs of economic activity to pop up in other places.
Were that the case, we might expect economic growth to keep pace with population growth, but for people to be "housing poor", since there would be a shortage of housing space (and already existing older housing). This could drive up rents and housing prices and increase inequality levels, or really create a burden on the economy.

 

The issue is always landowner privilege, never housing space.

 

The two are very much connected. When a necessary commodity becomes in short supply, prices go up.

 

That's why wealthy countries like the US should build (or purchase) a sufficient stock of public housing.
(link)
Here's how Finland solved its homelessness problem | World Economic Forum (weforum.org)

 

I don't think you get it.

Right now, we may be conflating two different issues. Public housing might be a way to address the problem of homelessness itself, but right now we are talking about housing shortages in the bigger overall economy.

If the issue is available building space where people want to, or need to live, then public housing is not really going to be the solution.

We've seen many cities in the US try this, and they do not get very good value for the amount of money they spend. Huge amounts of money get spent, and not many persons actually get housed.

 

Right: the greater the landowner privilege, the tighter the housing supply.

Land cannot "become" in short supply because it is in FIXED supply, and the only thing that ever makes housing in short supply is the legal requirement to pay landowners full market value just for permission to build more of it.

 

Because landowners own local governments, and the scarcer they can make housing, the more they can charge for permission to build it.

 

How about the other way around? Add more people, housing supply becomes in shorter supply, landowner privilege increases.

 

No. Absent landowner privilege, the more people would just build more housing. What would stop them? Oh, wait a minute, that's right: the legal requirement to pay landowners full market value just for permission to do so (aggravated by the local government permissions that landowners also control by funding almost all successful civic election campaigns).

 

Limited and scarce availability of building space in the desirable areas where job opportunities are.

It also costs a lot more money to build up. The building costs get exponentially greater once you go from two levels to three.

 

No, that's false. It is precisely the building of additional space that additional people would undertake, if they didn't have to pay landowners full market value just for permission to do so.

No it doesn't.

No they don't. You are just makin' $#!+ up. The far greater costs of foundations, roofs and external walls mean larger buildings are cheaper to build per unit of floor area up to fairly large dimensions. The main reason apartment buildings are not built even bigger is that people like having windows, and above a height of several (not two) stories, scaling factors make ferroconcrete -- which is more expensive -- safer for structures with a high aspect ratio.

 

You don't seem to understand how a market works. Price is determined by supply and demand. If you reduce supply, or increase demand (such as in more people), price goes up.

 

Yes it does.
Maybe you should go talk to a building contractor.
There are some reasons it starts getting much more expensive to build a 3 or 4 level building than a 1 or 2 level building.
It would be too complicated to fully get into that with you in this discussion, but part of the reason is special building codes that apply, and part of the reason is more structural reinforcement is required to support the weight, and each floor has to support the weight of the floor above it. There is a reason why 3 or 4 level buildings are rarely made with all wood frames, whereas 1 or 2 level homes almost always are made with all wood frames.

The big jump in price mostly comes from jumping from 2 levels to 3 and 4. Once you go from 4 to 5 or 6, the increase is no longer exponential.
(Although once you get to 15 or 20 floors in a skyscraper, it starts getting exponentially expensive again, as you add on floors)

 

I have taught economics at the college level.

Housing consists of land and improvements. The supply of land is fixed. The supply of improvements can be increased to meet demand if permission to build them can be obtained. Demand for land is based on the subsidy to landowning, which determines the price of permission to build housing. It is therefore the subsidy to landowning that determines the price of housing, not population increase. You might as well claim that the price of food increases with population -- when in fact, of course, it declines.

 

Yes, but the subsidy to the landowning is determined by the demand for land. So there's a bit of a circle there.

Might make it a little harder to economically analyze.

 

That's a little bit more of a complicated thing.
The price of food relative to food worker wages does increase when population increases. Although the price of food relative to land costs decreases (even assuming land costs are not allowed to change).

 

No it doesn't.

No, you should. Or go visit a website that calculates construction costs:

https://www.rsmeans.com/estimating-square-foot-cost

Nope. Not per square foot.

No it wouldn't. You're just objectively wrong.

Such reinforcement is very cheap to add. You are just wrong.

They are built routinely. I live in a city with literally hundreds of three and four story all-wood-frame apartment buildings, and the city has recently approved new construction standards for wood-frame apartment buildings up to six stories tall. You are just objectively wrong.

No, that depends on the location. In many places such buildings are normally brick or cinder block.

No it doesn't.

It's never exponential until you get near the strength limit for ferroconcrete: >40 floors.

No it doesn't. You are just makin' $#!+ up with no basis in fact.

 

No it's not. It's determined by the fraction of the land's publicly created unimproved rental value that is kept by the private landowner instead of being repaid to the community that creates it.

No there isn't.

It's easy to analyze if you are willing to know facts. You aren't. Simple.

 

No it doesn't.

"Allowed" to change? What does that even mean?

 

If you add more people, wage levels and cost of labor typically go down. That reduces the price of food.

But since the cost of food is made up both of a component of labor and capital, the wages of these workers goes down more than the cost of food.

 

Wrong. Back then, Menzies almost lost the 1960 federal election because the unemployment rate in the previous year had ticked up from .....wait for it.....1.9% to 2.0%!

 

If the unemployment rate ever went down to 4% in the US, people would jump and shout for joy. It would be considered an economic boom.

I think most economists these days believe an unemployment rate much below 4% is not sustainable for very long, more than a few years.
(not saying that is right, but that is what the great majority believe)

 

[link]

Unemployment Rate by Year Since 1929, Inflation, GDP (thebalance.com)

You will see the US had unemployment rates of 4% or less in 10 years between 1946 and 1970 (the 'golden era' of Western capitalism, before emerging post-war Asia muscled in on the game....).

Since then (1971 on) in only 4 years; interestingly including the last years 2018/19 bolstered by Trump's 'unfunded' tax cuts for the wealthy. And now Biden's 'unfunded' cash injections into middle class bank accounts will likely repeat it......it might be said both Trump and Biden are practicing a form of MMT, with the reserve bank "borrowing" the funds ..... (MMT says the government should simply "borrow" the funds debt-free from itself, since the government is the currency issuer, until the nation's resources and productive capacity are fully and sustainably utilized).

Now of course Rogoff and Summers are already bleating about inflation. I'm with Powell; let's see inflation firmly in the 2-3% range before we worry about inflation, and then deal with it WHILE maintaining full employment...that's where Powell and MMT will part ways, no doubt...