A Voice from the Past
WHAT I WROTE IN OCTOBER 2000:
Exclusionary Zoning Is Excluding
Our Children from California
The Real Economics of Growth Control
In October 2000, I wrote “An Economic Impact Analysis of an Inclusionary Zoning Ordinance” (at Exhibit D in the Book). It explained how and why the California home equity Ponzi scheme was not working. I warned that the real victims of the California home equity Ponzi scheme would be our children – the next generation. Some quotes:
“The real answer to the question, ‘Who benefits from scarcity’ turns out to be ‘No one.’” . . .
“In effect, artificial housing inflation operates as a tax upon economic ignorance. The Bay Area, in particular, has combined the most productive private sector in the nation with the most restrictive government housing policies in the nation to produce a very mediocre standard of living relative to our productivity.” …
“What we have going in California is a Ponzi scheme in which the addictive fix of increased home equity requires ever greater inflation in real housing costs.” …
“Through the magic of economics, the higher cost of California housing is fed back to the existing homeowner in the cost of virtually every private product and public service in California. This happens primarily through operation of the labor market.”
“If Bay Area residents choose to squander the highest incomes in the nation on artificially high housing prices, that is a local political choice. The market does not permit us to foist that cost off on distant consumers”. …
“The primary victims of artificial housing inflation are our own children. When our sons and daughters want to buy a house in the Bay Area (or equivalent communities) the real price may be double or triple what we paid. And our children will not have inflated home equity to roll forward as a down payment.” …
“How ironic and how just, that people who set out to enrich themselves at the expense of others, succeed primarily in impoverishing their own children.”
Click to read pdf of this section of the Book: From Exhibit D