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?