MeDenBlog

Brief Overview of a Housing Crisis

ISSUES/CHARACTERISTIX

– interest rates rising to dampen demand (but also supply, paradoxically) … this is due to an overheated economy i.e. demand outstripping supply and threatening inflation (rising prices)

– shortages in supply in the rental market result in rising rents and government rent assistance goes straight into the pockets of landlords

– government initiatives to alleviate the impact of interest rate rises again go straight into the hands of business through increasing prices

THE VICIOUS CYCLE OF FISCAL EXPENDITURE AND MONETARY CONTROL

– increasing the stock of public housing for both purchase and rental to increase supply and reduce demand and therefore prices and rents respectively, contributes to lowering of interest rates, increased building approvals and increased economic growh and a return of inflationary pressures and the inevitable pressures on interest rate rises to control inflation

RESOLUTION/SOLUTION

– is an overall long term concerted focus on increasing the supply side resulting in net gains for the general populace and a stabilized housing sector of the economy (essentially, long term planning ahead)

– in tandem, infrastructure issues led by redevelopment of transport and decentralization of industry-business must be addressed to forestall the longstanding pressure on inner city housing stock and therefore intra-sectoral diversions/counter-productiveness

AFTERWORD

– interest = usury = non-productive reward

? Martin Eden