A Nation of Rentiers | City Journal
But making one s town more desirable is just one way to protect property values. The easier way is to pass negative-sum policies that inflate housing prices by restricting housing supply, letting homeowners build wealth by taking it from poorer renters and future generations of homebuyers rather than by creating anything of value. Such policies, which account for the vast majority of the wealth accumulated by homeowners, are of recent vintage. As Jake Anbinder, a historian of American housing policy, points out, housing became a lucrative instead of merely stable investment only in the 1970s and 1980s, after the baby boomers had bought into the housing market. This turning point coincided with a massive surge in policies such as historic-district designations and ostensibly environmentalist slow growth land-use planning.
Anti-growth housing policies worked out well for the baby boomers who got in on the ground floor but have forced subsequent generations to confront massively inflated housing prices. One ironic result: homeowners today must take out massive mortgages to afford price-inflated houses, placing themselves in a precarious position that makes them even more risk-averse to downturns in their housing value.
And don’t forget having the Fed slurp up all those US Treasuries and mortgage sausages. My house is worth now more than it has been, even during the height of the GFT in 2008. Why I could sell it off and buy a sh*tty little 1 bedroom condo in the Bay Area! Or perhaps a palatial estate on Lake Okiepagokie in Texarkana. We’ll see.