Re-thinking the so-called Housing Bubble with Kevin Erdmann

Kevin Erdmann of the Mercatus Center returns to the podcast to discuss his new book, Shut Out: How a Housing Shortage Caused the Great Recession and Crippled Our Economy. From the publisher’s website:

The United States suffers from a shortage of well-placed homes. This was true even at the peak of the housing boom in 2005. Using a broad array of evidence on housing inflation, income, migration, homeownership trends, and international comparisons, Shut Out demonstrates that high home prices have been largely caused by the constrained housing supply in a handful of magnet cities leading the new economy.

The same phenomenon is occurring in leading countries across the globe. Gentrifying cities have become exclusionary bastions in the new postindustrial economy. The US housing bubble that peaked in 2005 is more accurately described as a refugee crisis than a credit bubble. Surging demand for limited urban housing triggered a spike of migration away from the magnet cities among households with moderate and lower incomes who could no longer afford to remain, causing a brief contagion of high prices in the cities where the migrants moved.


Links:

My previous interview with Kevin, from 2017

Kevin’s policy brief for Mercatus, arguing that housing was undersupplied during the so-called “housing bubble”

Kevin’s blog, Idiosyncratic Whisk

 

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