Friday, June 6, 2008

Houston's Housing Non-Bubble

"During the past year, I've made several appearances on television news programs to talk about the housing crisis. My role was that of the straight man. ... After the doom-and-gloom pronouncements from the coasts, I would say, 'Things aren't so bad here in Houston.'... Our housing prices haven't plunged, just as they didn't soar as the national housing bubble inflated. Our prices remained modest, if you believe the conventional wisdom, because we have a secret ingredient: plenty of land. ... In a report issued by the [Fed] of Dallas' Houston branch, senior economist Bill Gilmer found another reason Houston has been shielded from the country's real estate crisis: the lack of zoning. ... As housing demand has increased, cities with tight zoning laws saw a steep rise in prices because of limited supply. ... In Houston, however, demand was met with new construction rather than rising prices. ... Of course, Houston's lack of zoning is something that outsiders view as, well crazy for a city of our size. I must admit that before I moved here, I was among them", Loren Steffy (LS) at http://www.chron.com/, 28 May 2008.

Bravo LS. Compare Houston's experience California's. Or the oil business. Zoning is like prohibiting drilling in ANWAR. Eventually the lack of production, of houses, or oil, drives the price up. What's so hard to understand?

2 comments:

Big said...

The housing bubble in California (and Houston) was never caused by zoning. It was caused by poor Republican policy leading to low wages and reckless mortgage lending, which then resulted in massive real estate speculation.

The pretense of this article is that Houston prices haven't gone up because of lax zoning. That pretense is ridiculous because anyone can go to Zillow and see that Houston house prices have most definitely gone up and have been deviating from their trend line for years. There are a lot of California speculators in Houston too, which exacerbates the problem.

Independent Accountant said...

Big:
Zoning is a major issue in California. You don't know what you are talking about.