Senate Report: Bush Missed Chance To Catch Bin Laden
Leftover Metrocard Change Infuriates Some
2nd Avenue Subway Cooling System Will "Blight" UES
Bus Stop Brings Trash Tickets To Bronx Woman
Diners: Calories Counts Are Ruining Fancy Restaurants
New York magazine tries to estimate the impact of Mayor Bloomberg's ideas, actualized and proposed, on the city. They look at last summer's Republican National Convention, The Gates, and the Olympics, factoring in cost, purported benefit, the disruption factor, etc. The Mayor does seem hellbent into making NYC the world's "second home," but Gothamist hope that this still means, if he's reelected, that even if we don't these projects, he'll make sure the city is great as possible, as it's millions' first and only home. If Bloomberg would like to win another term, Gothamist thinks he should buy all New Yorker's another home, so we can say NYC is our second home, too.
And speaking of the city's terrible slogan, the NY Times asked our own Tien Mao for his thoughts on the matter since he wrote the post on it the other week. Also queried: Big Apple and other NYC phrase guru Barry Popik.
Photo of Mayor Bloomberg in someone's first home by Edward Reed, New York City
add to stumble upon
add to reddit
tweet this
post to facebook
The irony lies in the fact that Bloomberg hasn't made it any easier for New Yorkers to feel at home.
Bloomberg doesn't have to buy me a second home, he can my first home more afforadable and I'd be happy. I can't afford to live in the city I love anymore, why isn't this an issue on the table??
We're holding the mayor accountable for real-estate values now? Just as I don't think government executives should be applauded/blamed for changes in the job market or business's earnings, so too with real estate. Unless Bloomberg has been using his hefty bank account to single-handedly pump up a speculative bubble in New York home prices -- and even he doesn't have that much coin -- he really has nothing to do with it.
Real estate values in New York City began inflating beyond all reasonable levels many, many years before Bloomberg came into office. The reason? A surfeit of high wage earners who will bid very competitively on a limited housing inventory. It's simple supply and demand. Will the market "correct" on its own? It might, if there was a drastic run-up in mortgage rates or maybe another major terrorist attack. But I don't think any of us wold wish for either of those scenarios. Higher mortgage rates could make home prices crater as a dearth of favorable financing options dried up demand, and that would leave many New York homeowners with homes that were worth less than the value of their notes. It should be obvious why a big terror attack is a bad thing.
All that's the long way around saying: the housing market here is insane, it's probably here to stay, and please leave City Hall out of it. It could only make things worse.
Bravo! Well said by "Wait a minute".
Not quite well said, because not all the facts were mentioned.
The reason why there's a limited housing supply has to do with bad zoning laws, which is under the control of our lawmakers. The zoning restrictions accidentally caused an artifical (man-made) housing shortage, which then caused old-fashioned supply-and-demand to make prices inflate.
Read this:
Why is Manhattan So Expensive?
by Edward L. Glaeser
Professor of Economics, Harvard University
and
Joseph Gyourko
Professor of Real Estate and Finance, The Wharton School, University of Pennsylvania
I wasn't blaming Bloomberg for the housing costs, I'm a fan too. For the most part. I was just curious as to why this wasn't an issue being discussed per Better Research.
But another note, I was at a conference recently with Bloomberg, who stated, "Housing prices are rising in New York! That is a good thing! It means more people are living here!"
Good for the city, bad for me I guess.
The quote mentioned above by Laura is typical of Bloomberg. Sure, it's good that more people are living in New York, but what the cost of housing, which is a problem caused by bad regulatory laws?
It isn't Bloomberg's fault for the high costs of housing, but it is Bloomberg's problem, because he is not doing anything about it (ie: addressing the zoning regulations). If he was a true Republican, he'd be for at least partially deregulating the constrictive residential zoning regulations. Why in these past few years hasn't he done anything about it? One can only speculate. Hopefully it isn't because any of his friends want to make more cash in the real estate business, which I think was the case with Guiliani.
Bloomberg-lovers should reconsider their allegiance to a man who blatantly ignores the very real issue of residential zoning regulations. But perhaps these people don't mind artificially inflated rent, because they can easily afford $3000/month, so it's no issue to them.
The so-called "better research" linked to here is typical conservative kvetching about regulatory interference in the marketplace, and in order to accept their conclusions you also have to accept a whole lot of squishy unscientific nonsense about "social costs" and similar. It's also simply not credible to issue an entire piece on housing-market economics with nary a mention of financing costs.
Besides, stripping away zoning regulations would suppress the run-up in real estate values for about five seconds. An increase in the supply of lower-priced housing would simply add to a crowded market a new class of bidders to compete with those only marginally priced out of the current market. Speculation would increase, not decrease, and prices would spiral again. The proposed solution of relaxing the regulatory framework is the housing-market equivalent of fiddling while Rome burns.
Not so fast, Mr. Not So Fast.
It's true that government regulation artifically controls and hampers the amount of residential units the market can bear. I don't even have to follow "Better research"'s link to know that. It's only logical, that with all the absurd land restrictions, FAR allowances, and worst, but not least of all the outdated, union-written building codes, that distort the price signals in the marketplace which can lead many, even seasoned developers to build the "wrong" project at the right time and vice versa. I emphasize "wrong" only because a truely free marketplace would balance the needs of low-to-middle class housings, businesses, hotels, which are all in trouble now because of the favored status of luxury condo developments, triple-A chain tenants since those are the ones which are almost sure-shot in this government-intervening economic distortion.
Of course, the city in all its many dolent bureaucracies does this mainly in the pretense of careful, controlled growth, and the protection of historically significant buildings/areas.
Which is a nice thought, but central planning never quite pans out that way. And which also requires that one accept the premises of your ilk; that individuals are slaves to the state, not in control of either their bodies or their properties. Something which many conservatives themselves find hard to accept too, by the way.
The fact that you automatically lumped "Better Research" and the data he provided into the conservative camp, you defeated any of your own arguements into a silly squabble of ad hominems and pigeonholed-titles. I would in fact wager that "Better Research" is a libertarian, or at least thinks like one, if he doesn't call himself one.
Let me be clear: Freer development, increased choice, and balanced economic risks are all very nice indeed. However, simply removing zoning rules or reducing zoning levvies is a poor solution for the question at hand, and the paper offered up from the Manhattan Institute is poor research. Transforming New York City into a wild west of property speculation would mitigate against the very economic virtues you claim to favor, and that's exactly what removing zoning controls wholesale would provoke.
Now, is it a fact that the biases of the researchers are transparently right of center? Yes. Is the research poor because its sympathies tilt toward the "conservative" end of the ideological spectrum? No. I'd be equally as quick to identify the same flaws I pointed out above in research generated from the left side of the political spectrum. But I see no detriment in calling the paper what it is.
"but Gothamist hope that this still means, if he's reelected, that even if we don't these projects, he'll make sure the city is great as possible, as it's millions' first and only home"
Please tell me that wasn't written while sober.
"Transforming New York City into a wild west of property speculation would mitigate against the very economic virtues you claim to favor, and that's exactly what removing zoning controls wholesale would provoke."
Pray do tell what exactly is wrong with the "wild west" style of homesteading? We would be settling west of the Mississippi about now, if central planners were in charge of how to "best" develop the wild west.
What bothers me more is the sheer arrogance that the central planners have, going about their thinking how they know what best for everyone, and moreso they will force everyone to live by their rules and controls.
I do not understand your chain of thought of how controlled-development leads to more affordable housing, more local businesses, and better economic planning overall, rather than if the marketplace, through its many profit-oriented institutions provided such to the consumer.
You realize that there is only so many people who can afford a $3.5 million apartment, and that ultimately the many developers would compete against each other to provide for the best possible, most affordable housing needs. But they can't do that when there exists an artificial scarcity of square footage that they can build, and when the resulting land costs comprise a high-portion of the housing value, it's no suprise that the developers cater to the customers and businesses who can afford such.
The Manhattan's Institute data is irrelevant in any such case, and a futile gesture in the face of central planners who empiracally "know" otherwise. It's a priori knowledge that people act in their own self interest, and that goes for developers too. They certainly won't engage in a project to lose money. The city's offer of HUD tax abatements, low-cost financing, etc. is a poor subsitute for unrestricted development.
BTW, I would seriously love to learn how you reached your conclusions, if only to learn how to critically scrutinize my own.
I never argued that controlled development leads to affordable housing. But I did argue that rolling back zoning rules would lead to an even more devastating run-up in prices. Why is that seemingly so difficult for you to recognize?
Lifting New York City's zoning restrictions isn't going to return us to some pastoral state of free-market equilibrium. It will only introduce further speculative chaos up and down the price spectrum. Why is that? As I said earlier, if such an action has the initial depressive effect on real-estate values that has been claimed, money that was previously priced out of the hot market will be drawn back by the prospect of lower prices. Higher demand means higher prices. If you think that removing regulatory hurdles is going to incentivize developers to build low-cost housing, I suggest you think again.
For someone who holds themself out as a protector of market fundamentals, you certainly have a deficient understanding of them.
It is often said that government intrusion into the free-market begets further government intrusion later when the unintended consequences rear their ugly results.
Ugly results such as "speculative chaos" and land depressions that which any rational person would want to prevent. When you look at the problem clearly, it was the distorted market signals which led to the land being overvalued, thanks in no part to the central planners.
A person who is constantly being physically harmed doesn't rationally seek a lesser harm that he could tolerate; he seeks to overthrow that which is harming him even the slightest bit.
The same goes for the value-subjective free market. Your proposal seeks to treat the symptoms of an encumbered free market, with more and continued encumberences!
The reality is that if zoning restrictions ended tomorrow, individuals would be able to begin making proper and undistorted economic decisions regarding their personal spending habits.
The re/finance bubble would have never occurred. Mortgage debt would shrink for two major reasons; firstly because fewer people would decide to purchase until they were financially secure, and secondly because the residences they purchased would actually decrease in value, as it properly would in a unhampered free market enviroment.
I do agree that if it all changed tomorrow, the sky-high valuations would change. But who are you and I to judge what change is best for consumers? And to furthermore punish them for what the bureaucratic folly created? Purely abhorable.
It is clear that you employ linear thinking, so you could never grasp how markets dynamically adjust to better serve the consumer, and therefore all your specious speculation of post-deregulation corrections cannot be empirically determined beforehand.
Actually I'm just engaged in thinking, whereas you are engaged in fervent wishing. In what fantasyland do "markets dynamically adjust to better serve the consumer?" Markets are nothing more than instruments for efficiently valuing assets, not some idyllic state of being. You still have yet to demonstrate that you have even the slightest grasp of basic economic principles or the English language.
Who would buy a house to watch it decrease in value? That's totally idiotic.
I suppose if you truely were a qualified judge of what constitutes proper economic principles, you would know that market most efficiently allocates assets for the sole purpose of delivering benefit to both sides which engage in the practice.
The bit about the consumers being the ultimate benefactor has to do with division of labor, the beauty that a free market provides and government erodes. But since you have yet to prove your economic mettle, and instead like to parry words in place of justification of your authoritarian, I-know-better-than-you policies, you can politely take that and your supposed economic knowledge and shove it in a roomful of Chicagoites.
However if you are serious about understanding the praxeology underlying economic principles, read Murray Rothbard's "Man, Economy and State" or Gene Callahan's "Economics for Real People: An Introduction to the Austrian School".
"Who would buy a house to watch it decrease in value? That's totally idiotic."
[Tounge-in-cheek]Who would buy a car/boat/computer to watch it decrease in value? That's totally idiotic.[/Tounge-in-cheek]
Obviously, people wouldn't pay as much for a house if followed the standard convention of depreciation, like other market goods. And it's also a convenient example demonstrating how a distorted market signal can confuse even the smartest people, to mis-valuate. And unfortunately, they pay the price when the market corrects itself.
I would love to drive a Ferrari or eat at Per Se or drink Haut Brion. BUT I CANNOT AFFORD IT! So should I sit around and bitch? NO! I drive a Honda, eat at McD and drink a Bud.
It's life. Deal with it.
So back to the issue: Michael R. Bloomberg. Has he done anything to counter the high cost of housing other than throw us a pitiful bone with plans for new outer-borough section-8's?