Many blog readers know that I promote conservation and alternative energy in order to reduce pollution and other negative effects on the environment. Throughout the decades of covering this theme, I discovered that many policies pursued for economic growth are diametrically opposed to the goal of limiting our impact on the environment. Take a look at “Housing Starts Are Negative“, “Housing Starts are Positive?”, or “FED says-build more houses” for more discussion of the topic.
This topic came up in some housing data released recently. Make sure you are sitting down before continuing on. The supposed “good” economic news in this report is that in Las Vegas, housing building permits are up 57% since last year. Set aside the “building-for-growth’s-sake” detriment for a minute and focus on a couple other items from Las Vegas. According to a University Of Nevada Las Vegas study, the city currently has over 40,000 vacant homes! Even more amazing is that lower and middle income people cannot find houses to buy. Why? Many financial analysts say large investment groups/banks/hedge funds are busy buying up property and building new property using cheap money coming from central banks around the world. See here. This has put upward pressure on homes prices and locked many of modest income out of the market.
So rich investors are buying (and building) to rent even though there is still an ENORMOUS glut of houses on the market in the U.S. Does this strike anyone as environmentally unsound? Does the country really need more sprawl when it already has millions of empty homes and strip malls littering the landscape? Some people are speculating that these investor groups hoping to rent property (a wealth preservation strategy) are going to have a tough go of it because rents will probably fall with so much property available. Renters have thousands of choices, even in small cities. They can pick and choose, and with falling real incomes in the U.S. they are going to be choosing value-priced housing. Which has more than a few people wondering:
Is the country headed for another housing bubble and crash?
If the new housing “investors” (including some banks and some federal agencies) lose money AGAIN, will they need a bail out with taxpayer money AGAIN?!!
Shouldn’t we learn from our past mistake(s) and try to build more sustainable infrastructure (including hardening such infrastructure against severe weather). Here is a recent article that is obvious on its face, suburbs should be combining housing, shopping areas, and public/government buildings together in order to save space and save energy. Building smarter instead og just building for “growth” seem like a good idea. What do you think?
Which brings me back to the thoughts detailed in “Housing Starts Are Negative” and related to some futuristic themes I detailed in “The Faster Changing Future” and “Information as Cheap Commodity“. The world is changing. The population growth rate is declining. Automation is really starting to affect large traditional job markets for humans. Knowing these things, we should be changing our economic way of thinking. Societies should probably focus a bit more on the people that are already here instead of looking to population growth, building more ”houses and roads”, and “consuming” large quantities of stuff as a way out of the morass. Maybe a little population decline would be a good thing. Our economic models would go bust, but the environment would be a lot better off. Maybe people would be better off as well. Maybe the world is crowded enough.
Have a pleasant Tuesday! Meteorologist Justin Loew.