Housing financialization, wages, and retirement

I’ve been thinking about housing again and the critique about homeowner wealth hoarding. Since so much of the value of urban land is collectively created, there is strong case for taxing part of that increment at the very least, if you don’t go full on Henry George and take it all.

This morning we had a nice entry from Richard Florida in Citylab on the global housing crisis, and in particular, he does a really nice job of explaining the “financialization” of housing. I’m not sure he’s right about the luxury housing claim he makes at the end (I’m not sure he’s wrong, either; it’s an empirical question and I haven’t seen data). But otherwise, he does a good job explaining how how big financial institutions have had a stake in keeping urban land paying out. As much as we love to traduce greedy, self-interested, wealth-hoardy homeowners, they’ve got company here.

As to all that…I’ve been observing the graphic that is going around about how much urban California homeowners make per hour in home appreciation.

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This is from a nice policy brief from Zillow Research. I’ve looked for the original story and I can’t find it. I’ll keep looking and add the link when I find it.

As we look at these, it would be a good idea to think about the other labor and social welfare changes. Wages have, for the most part, stayed pretty stagnant even as urban economic productivity has spiraled upwards. Pension and retirement plans–as well as social security–have become much less generous (though this change is more recent).

It seems to me that homeownership in cities is more like Walmart employment than we may realize. Walmart (and other employers) abuse public assistance by paying poverty wages and shifting the cost of their labor onto the public sector. For relatively high-wage workers in cities, the fortunate ones supplement stagnant wages and eroding retirement support with a share in the land speculation.

I’m not saying this is right or good. I’m just noticing. What would you have to pay a neurologist in a city if they didn’t have returns to owner-occupied housing?

Sorry this post isn’t great but I have to go teach and I’m distracted.