Re: Not always joking, it seems

In article <3_Zuj.10501$XI.3178@[EMAIL PROTECTED]
>,
 Jette <bosslady@[EMAIL PROTECTED]
> wrote:

> David Friedman wrote:
> > In article <nCYuj.10454$XI.7665@[EMAIL PROTECTED]
>,
> >  Jette <bosslady@[EMAIL PROTECTED]
> wrote:
> > 
> >> Keith F. Lynch wrote:
> >>> Ted Nolan <tednolan> <tednolan> wrote:
> >>>> Keith F. Lynch <kfl@[EMAIL PROTECTED]
> wrote:
> >>>>> I'm really baffled by that claim.  In 1967, the average one-income
> >>>>> family could afford to buy a house.  By 2005, the average
> >>>>> two-income family could not, even though 20-year mortgages had
been
> >>>>> replaced by 30-year mortgages.  In 1967, nearly everyone could
> >>>>> afford medical insurance.  By 2005, tens of millions of Americans
> >>>>> could not.
> >>>> House sizes were in general much smaller in 1967, and they didn't
> >>>> have a lot of modern amenities.
> >>> If people today can afford small houses but not large ones with
> >>> amenities, why have house sizes and amenities increased?  Why isn't
> >>> the market providing what people can afford?
> >>>
> >> A very good question.  Why do developers have to be FORCED (by law if

> >> necessary) to provide "affordable housing" options?
> > 
> > Several possibilities, all of which might be true in different places:
> > 
> > 1. What you mean by "affordable" is a combination of house and price
at 
> > which the developer loses money. 
> 
> It's been calculated in the UK that building a house can cost as 
> little as 60K (GBP) to the developer - but in Edinburgh there are no 
> "new build" houses or apartments going for less than 150K (GBP)

"can cost as little" isn't entirely clear--what are the assumptions? 
Also does that include land? 

Don't you think that if it costs 60K to build and you could sell for 
150K there would be an enormous number of firms building, and a huge 
number of houses being built? Which suggests that your figure is 
bogus--either omits im****tant costs, such as land, or expenses of 
getting permits, or ... --or is for a house people wouldn't want to 
build.

> > 2. In some areas, it's effectively illegal because of zoning laws, 
> > building codes, and the like, which mandate a level of house that
isn't 
> > what you would consider affordable. That might be deliberate--one 
> > function of zoning laws is to keep poor people from living in places 
> > where the majority of the current residents don't want them as
neighbors.
> > 
> 
> Not applicable in the UK.  We don't have "zoning laws" and ALL houses 
> have to be built to "code".

If the relevant laws are the same across the UK, they probably aren't 
being used to keep poor people out of particular areas--only "probably" 
because laws making new houses expensive might effectively segregate 
poorer people into older areas. But the code might still raise costs. In 
the U.S., another use of building code was to keep up employment in the 
relevant craft unions--requiring copper piping instead of plastic, for 
example, so as to maintain the demand for plumbers.

> > 3. Because new housing can't compete with old housing at the low end
of 
> > the market. Most of the American poor own cars--but I doubt many of
them 
> > bought the cars new. A large minority of the American poor own their
own 
> > houses--but I doubt many of them were bought new either.

> My flat (apartment) cost 17.5K when we bought it 27 years ago.  It 
> would now cost 190K to buy the same flat in the same street.  Our 
> income hasn't gone up by the same ratio.  Technically we couldn't get 
> a mortgage to buy our own home, if we hadn't already paid off the 
> mortgage.
> 
> Oh and although it *looks* like we've made a huge profit, anything 
> more or less equivalent would cost us even more.

Perhaps you aren't living in the same place that people at the low end 
of the housing market would buy now.

Any idea what fraction of the households in the UK own their own houses?

-- 
 http://www.daviddfriedman.com/
http://daviddfriedman.blogspot.com/
 Author of _Harald_, a fantasy without magic.
 Published by Baen, in bookstores now