Housing pricing - Essay Example

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When Low income housing advocates talk of affordable housing, they refer to affordable housing to the low income population, such as the twenty percent of the people earning the lowest income in a region (Brueckner 2001). On the other hand, when builders talk of housing…
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Introduction: When Low income housing advocates talk of affordable housing, they refer to affordable housingto the low income population, such as the twenty percent of the people earning the lowest income in a region (Brueckner 2001). On the other hand, when builders talk of housing affordability, they basically refer to that portion of houses on sale that are affordable to those people earning a median income in the region (Brueckner 2001). There is no doubt that both these two measures are essential, however if housing is unaffordable or beyond the reach of that section of the population in the median income, then it is obviously beyond the reach of low income families.
The Problem of the affordability of housing:
A recent housing affordability ranking published by The National Association of Home Builder revealed a number of shocking findings. One of the findings of this research revealed the tendency of the less affordable areas to have high densities (Staley et al 1999). This can be explained out as a response to higher land prices, which essentially means that whenever there is land scarcity in a certain areas, people will always bunch-up, while when there is no such a scarcity, majority of people will choose to reside in low density areas (Staley et al 1999). In fact, the only surefire way that smart growth can increase densities is through the creation of an artificial land shortage, which will consequently drive up land prices (Staley et al 1999). The reason behind driving up land prices is because high land prices normally make housing less affordable. Other than density, local economic together with geographical location have been found to play major role on the affordability of housing. In this regard, we can look at the supply of land.
Normally, Urban-growth boundaries create artificial land shortages that subsequently render land for housing less affordable (Gaeser & Gyourko 2003). A classic example of urban-growth-boundaries-induced land shortage can be found in Oregon where urban-growth boundaries around its cities were established in the late 1970s, boundaries that included sufficient vacant land enough to sustain about twenty years of growth (Gaeser & Gyourko 2003).
It has been confirmed that housing prices might as well rise as a reaction to the absence of substitute housing in an areas for the regulated housing (like when the whole housing market is regulated). This absence of substitute housing has also been found to be at the center of the failure of majority of efforts towards relocating development. The best that can be done to caution poor people from suffering from increases in housing prices is to ensure that there is always adequate substitute housing (Gaeser & Gyourko 2003).
Ethical consideration of restricting housing:
The ethical consideration of limiting housing in certain areas has been a subject of debate for quite some time now. There are those who argue that ‘forcing’ people to live in places that are not of their desire in the name of controlled housing is unethical (Tucker 1997). This makes a lot of sense especially when looked from the perspective of an individual person. However, looked from the perspective of a community there is no doubt that limiting housing development in some cases is not unethical but most importantly beneficial to the society as a whole. The moral of restricting people from residing in an area of their choice would be unethical if it was for the greater good of the community or the greatest number of people as would be the case with restricting the construction of a school or a church in an area where it is required.
Works Cited
Brueckner, K, Jan, Urban Sprawl: Lessons from Urban Economic, Brookings- Wharton papers on Urban Affair, 2001, Retrieved on 9th November 2011 from
Gaeser, L, Edward, & Gyourko, Joseph, The Impact of Building Restrictions on Housing Affordability, FRBNY Economic Policy Review, June 2003
Staley, R., Samuel, & Mildner, Gerard, Urban-Growth Boundaries and Housing Affordability: Lessons from Portland, 1999, Retrieved on 9th November 2011 from %20Managing%20Urban%20Growth,%20Lessons%20from%20Portland.pdf
Tucker, William, How Rent Control Drives out Affordable Housing, Cato Policy Analysis Paper, No. 274, 1997, retrieved on 9th December 2011 from Read More
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