Yes, America Has a Housing Emergency – Paul Krugman
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Paul Krugman's article argues that America is facing a housing emergency, and the discussion revolves around potential solutions and the underlying causes of the crisis.
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Zoning in Japan is at the national level. Japanese houses are WAY cheaper than American ones, while being of better quality at the same time.
And FWIW, homes in the USA have a massive variety of quality. Generalizations about such things are going to be flawed.
The builds are superior and so are all the appliances inside the home. Let's compare,
American - Japanese
Hole in the ceiling with wires hanging out - standardized ceiling sockets which can plug in and out different light fixtures and support their weight. Every light fixture in the country can fit the same socket.
Cheap asphalt shingles - Standing seam metal roof with heated embedded gutters (this roof, with no heating, in the US costs more than the whole Japanese house)
Tank water heater, runs out of hot water, fills up with sediment - Tankless water heater with adjustable temperature control panel, never runs out of hot water
Primitave toilet, leaks, just jiggle the handle! - Toilet with heated seat, bidet, hand washing sink in the top of the tank, eco and full flush options, plays privacy music, motion detector lifts the lid to greet you, automatic flush when you stand, and a wireless panel to control all this on the wall beside it.
Washer, dryer requires 220V special plug and a vent hose that is a fire risk, seperate units - ventless washer and dryer in one unit no bigger than a single American unit, washes and dries 6Kg loads (twice that if just washing), self cleaning. Just throw your clothes in, come back later to clean dry clothes. Space efficient and all it needs is water, a drain, and a standard two prong plug.
Central HVAC system requing expensive dust collecting ductwork, not energy efficient - quiet minisplit, inexpensive to purchase, install, and operate. Doesn't blow dust everywhere.
Winterizing? You need to call a plumber, pay him several hundred dollars, takes hours because your tank hot water heater is full of sediment, he blows compressed air into the pipes blowing nasty crap all over your sinks where it will stay since there's no way to wash it until the water is turned back on - All plumbing is routed with zoned cutoff valves. Each zone has a spigot at the lowest point in the house. Turn off the zone, open the faucets, then open the spigot for that zone. Gravity drains the water out of the pipes and into a drain out to the sewer. Winterize the entire house in 30 minutes flat with nothing more than a pipe wrench.
Shallow bath tub, which will empty your tank water heater in no time. But you'll never really use it because you have to sit in a tub full of your own filth, gross - Deep bath tub you can fill with your tankless water heater, hot water up to your neck, room for two. the shower head is beside the bath, not in it and the entire bath is a wet room. You clean your dirty filth off with the shower before getting into the clean bath water. The bath has massage jets and a reheater so you can warm the water back up if you just feel like soaking in it for hours.
Electric stove, maybe gas. Low tech, burns your house down. - IH cooker. Easy to clean, turns itself off if it detects you left it on with no pan or an empty one.
>They are not built for longevity
Immediately after WWII, they were not, because the country was destroyed and people needed houses fast. Those houses are all gone now. The ones standing today are very well built. Better built than houses in the US. It comes down to a lot of little things. The technology is better and the entire layout of the home makes much more sense in Japan. It all works together in harmony, and you really feel it once you come back to America. Here you spend so much time cleaning and dusting and moving laundry around the house and never really warming up with a nice bath and always a dirty feeling butt because you just have toilet paper and just wanting to go back to Japan because you've experienced a much better standard of living there. But you're here now in a house that cost 10x as much, but it feels like you're camping in a tent by comparison.
https://www.zillow.com/homedetails/317-Wolf-Run-Dr-Whitefish...?
That home was built in 1996.
Now look at this house, built in 1993. Similar age, but a much more modest home. About $234,000 at today's exchange rate.
https://www.athome.co.jp/kodate/6983847649/
Look at the bath in picture 6. Notice how the bath is a full wet room. You can't tell in the picture, but that tub is so deep, the bottom is below the floor level, which is typical in Japan. Notice how you don't see a shower head inside the bath, it's outside it. You wash yourself clean before getting into the tub, so you aren't sitting in a pool of dirty soapy grey water.
Now look at the toilet in picture 10. Notice the attached controls for bidet and seat heater. Notice the space efficiency of the toilet, the sink in the top. Each flush runs the water right when you need to wash your hands? Make use of it. Harmony.
Notice how the bath and the toilet are in separate rooms. Because why would you defecate in a room where you're supposed to be getting yourself clean? The smell alone should tell you this doesn't make sense. Yet in every American bath, you'll find a toilet. This is not hygenic, and every American lives this way.
New construction in the US is also absolutely not built for longevity unless you are paying a significant markup for actual craftsman materials and labor (and this would amount to less than 0.1% of new construction, probably closer to 0.01%). Of my friends who work as GCs and similar, a lot of homes built in the mid-90s are considered tear-downs, and they believe that number will only increase.
Firstly, a significant number of houses are one family lifetime. People clearfell and rebuild routinely. The marginal value of a home is different when it's lifetime is constrained. Not all houses by any stretch, but its far more common.
Secondly Japan's population is shrinking. It's further along a pathway the developed economies share absent immigration. Thus, there is far more housing stock to head of population.
There is a third reason and it is perhaps more relevant: Japan's zoning laws are bizarre. You can put a house up next to a tire recycling plant, and have a Zen temple across the road and a sofa factory operating out of your front verandah. Nobody seems to care. California take note.
I think the main thing we need to do is make a federal property tax for any unused house or rental. Something that billionaires can afford, but only for their personal homes - and something that will basically force all landlords to sell immediately. Every actual real property will be forced onto the market in seconds and everyone will be able to buy a house that needs one for pennies on the dollar. It will be amazing. Let's start with 1000% per hour.
It amounts to a mass seizure and redistribution, except those who were seized from still have to pay back what they borrowed, so it's even worse!
As a home owner, I think the best move for the country as a whole probably doesn't align with the financial interests of the current home-owning class.
The idea of a home as investment seems to inevitably cause this kind of conflict.
Only condo homeowners, and people living in truely rural areas "irrationally", will remain.
a lot of SFH get turned into dense apartments, and a lot of homeowners get rich as hell because they own the land.
We should have a LVT, so the landholders don't get too rich, but it can be a bit lower than ideal (which would mean that conversion to apartment is break even because future earnings - cap ex and taxes net out)
Not possible, because if its a tax an unused homes or rentals, what it would force people to do is either:
(1) make it qualify as “used”, or,
(2) destroy the residential structure on the land to preserve the value of the underlying land, which would no longer have an unused home or rental on it.
(Of course, you’ll never get the Constitutional amendment needed to carve out a new exception to both the prohibition on unapportioned direct taxes and the takings clause of the 5th Amendment that you’d need for that, so its moot anyway.)
When land is taxed, but the property on it is not, and rates are normalized to maintain neutral tax flow due to the change:
1. Someone who owns land with little productive development, will see a large tax increase.
2. Someone who owns the adjacent same-sized plot, with higher value development, will pay the same tax, instead of a prior much greater tax.
So development isn't taxed, making development more attractive, as it will have a higher return.
Much greater incentive to usefully develop land. Much greater disincentives to holding relatively less usefully developed land.
Also good alignment:
(1) a land tax, taxes the exclusionary asset, paying a tax on essentially rents the land from the community. Which makes sense.
(2) Not paying a tax on development, removes a wealth tax on any land owner from any financial scale.
(3) That wealth tax on wealth disincentivize development, relative to other investments.
(4) The lower property taxes on less developed land, that we have now, means that high value property wealth tax, is subsiding the returns of Lower development land owners.
(5) And that imbalance accounts for lands use as a financial instrument, instead of land + use, as the investment. Holding land prices up, while subsidizing non-development holding.
The elimination of most land-price driven investment, would reduce a massive amount of artificial demand, resulting in more supply and lower prices, for those who wanted to make returns by further developing the land.
Land's use as "gold" is incredibly wasteful.
[0] https://en.wikipedia.org/wiki/Henry_George
developers mass-producing cheap, inhumane housing, set on tiny parcels designed to maximize developer profit MEETS most potential buyers/renters have zero interest in that crap
?
Owner sold the lot three years ago and a developer built a home there that the new owners moved into two years ago.
Barely a month goes by without some vehicles from the developer or their subcontractors being at the house. They've done two foundation repairs, relaid the driveway, there's drywallers, plumbers, electricians, even the fencing needed repair.
When I was young, I thought "builder grade" was a good thing, now I know it as "cheapest materials you can possibly find, thrown together as fast as humanly possible".
I live alone in my house. It was built in the late 1940s. This house likely housed couples with children, 3-5 people, instead of the 1 it holds today.
Coupling up would reduce housing demand, and should in turn lower prices as availability increases.
I get the population will still grow, and we will likely still need some amount of housing growth over time, but we don't need nearly as much as we think we do.
We also don't need to avoid the middle of the country. The population has been moving to the coasts, while the Midwest has lost a ton of people since the manufacturing moved elsewhere. With a lot of companies, there is no reason they can't be in the midwest where there are a lot more affordable homes, and a lot of space. We should be looking to draw people from these HCOL areas to help bring back these cities. It seems like a win-win situation.
This is one of the arguments for high-speed rail. The primary reason to move to a HCOL city is employment opportunities. The rapid growth of rail, both street cars and commuter trains, early last century allowed metropolitan regions to expand by allowing people to work downtown but live further away, dramatically easing housing pressure. The advent of the interstate highway system originally had a similar effect, though later also a fracturing effect, especially outside the few cities capable of holding their core.
High-speed rail promises to achieve the same thing, just as it has elsewhere around the world. Certainly it's a promise CAHSR is selling, and a major reason we should strongly support it. And it's one of the primary justifications it runs through the Central Valley rather than taking the shortest route between SF and LA. It puts Central Valley cities squarely into the SF and LA metro regions, not only creating opportunities for existing Central Valley residents, but allowing people to move further out, reducing housing pressure. You simply can't achieve the same thing with bigger airports and more flights, not until flying cars become ubiquitous.
https://hsr.ca.gov/communications-outreach/maps/
What we ought to do is encourage more economic development and business growth in the Central Valley instead of trying to cram more and more stuff into the Bay Area. The infrastructure there is already overloaded, and it's geographically constrained by water and mountains.
Paralleling I-5 seems like a much stronger argument, though I'm not sure that would have been better and it may have never gotten off the ground at all. For one thing, Stockton, Fresno, and Bakersfield might not have supported CAHSR if it bypassed them. But also, AFAIU, Federal funding was contingent on following the routes laid out in the national high-speed rail plan drawn up in the 1990s, and the recommended California line went through the big Central Valley cities.
What's really held back CAHSR has been the law suits and related dithering (e.g. environmental reviews more prolonged because of the expected law suits). That sapped momentum, and momentum is everything; time is money. That loss of momentum also means CAHSR is having a much harder time getting over the humps, literally (tunneling through the mountains) and figuratively (financial support for the tunneling). If construction had proceeded as fast as it has in most other countries, people wouldn't be perennially debating the chosen CAHSR route.
I would argue that if they aren’t there now, there probably is a reason that you are overlooking.
If you need non-remote employees at all (and if you don’t, where the company is located with regard to housing doesn’t mean anything), then there is a cost to not locating where people with the skills you want currently are, and also a cost to not locating in a place where the people you want to hire would want to be.
> We should be looking to draw people from these HCOL areas to help bring back these cities. It seems like a win-win situation.
I’m sure when you just state it as a goal without a concrete plan or costs, it seems that way: we should just wave a magic wand and make people’s preferences changed so what isn’t in demand is in more demand and what is in demand os in less demand. Simple!
When you try to come up with w concrete plan to do that is when it becomes more problematic.
There are not enough houses, and you are encouraging more long-term demand for houses…
> We also don't need to avoid the middle of the country. The population has been moving to the coasts
Maybe a better question to ask yourself is why people prefer living on the coasts. What government policies draw them from the cheap places to the expensive places? How can you copy those policies to convince people to move back?
But it doesn't seem to be enough. The median age of first time marriage keeps creeping up and up. It's over 30 now in the US and higher in the EU.
Not sure what real tax breaks there is if both people make similar income. Otherwise if only one works, they’ll definitely see lower taxes thanks to the doubling of the standard deduction (plus exemption for the spouse).
In the circles I run in, most people who don't live with a romantic partner have at least two long-term roommates, mostly friends from college or made in adulthood. Several of these three to five person groups own detached homes together that no pair of them could possibly afford.
Famously, Shawnee, KS banned "co-living" a few years back, because (in the city council's opinion) too many people were living with others.
The number of houses doubles, but not their volume.
Basically we're at a point where used housing is actually far more valuable than list price because it would be absolutely impossible to rebuild any used house for anywhere near the amount it sold for.
It’s hard to change these policies in part because the basis of American wealth for most people IS the value of their real estate, so anything that would reduce the cost of a house will also reduce the wealth of a large swath of society. And rent control warps thing, by making existing renters also benefit from the status quo by locking in their rents, leaving only new renters as those who demand cheaper housing - the very people with the least electoral influence given that they’re usually younger and not established in the communities they’re moving into.
We need ways to align incentives so that these people can clearly understand their personal benefit from the good that densification would bring, alongside a reorientation to base their wealth on something that isn’t shelter.
USA is not the only place with inflation, but it still ends up with housing far more expensive than other countries. That’s because of policy primarily, material costs secondarily.
https://en.wikipedia.org/wiki/Underoccupied_developments_in_...
5 Years On, China’s Property Crisis Has No End in Sight https://www.nytimes.com/2025/08/25/business/china-property-d...
For example notice the item categories in the index: https://www.bls.gov/news.release/cpi.nr0.htm
And then compare them to the companies in the subsidy tracker: https://subsidytracker.goodjobsfirst.org/parent-totals
So another story we could be seeing here is that heavy government subsidies are barely managing to keep consumer prices down in many categories, except for housing.
My general opinion: we don't have just a housing emergency. We have a general emergency across many, many categories. If the government stops all these subsidies we'd see prices for everything else skyrocket across the board to match housing prices. Then wages would be forced to rise too, and you'd see the true underlying crisis: hyperinflation. Houses are worth so much because they are one of the best hedges against hyperinflation. If the US dollar gets inflated my house suddenly gets very easy to pay off and its now my primary form of wealth. So no wonder housing is so expensive.