Some Unanswered Questions on Housing
Perhaps it’s healthy every now and then to post something without implying that one knows how to fit it into a mural of opinions. If so, I’ve found an opportunity in this news:
Rhode Island’s median house price jumped 13 percent in March, rising to $265,000, as the inventory of houses for sale plunged by 16 percent, compared to March 2017, the Rhode Island Association of Realtors reported Thursday.
Naturally, the realtors’ association suggests the problem is that they need more properties to sell. In general, the trend would seem to count as contrary evidence to assertions that the state is losing people.
Both economic curves that bear on price come into play, here: supply and demand. It could be that people want to buy property in Rhode Island, and that’s driving up prices. Or it could be that regulations are too restrictive to allow sufficient expansion of supply. And referring to “regulations,” we have to expand the term not only to mean direct zoning restrictions and the like, but also other regulations, like licensing restrictions that drive up the cost of building.
Too many threads must be unwoven, here, for a rainy Thursday, and I don’t have a quick answer. I continue to hold that people should have a right at the local level to determine what sort of community they live in. (Although, I’ll generally argue against using that right to hamstring your neighbors.) I’d also suggest that we do too much to subsidize some construction while restricting different kinds of construction (say commercial versus residential), and much too much to prevent the economy from growing quickly enough for people to be able to afford housing.
My suspicion, in other words, is that all of Rhode Island’s economic meddling is doing something to focus economic value unnaturally on housing. I also suspect the people who benefit from that state of affairs would be much better able to explain it.