Four Simple Solutions to Make Housing More Affordable

June 16, 2016
MarketWatch: Why there’s a new kind of housing crisis

The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing.

Simple government solutions exist.

1. Always lower interest rates faster than housing prices rise. That way mortgage payments will eventually fall to zero, and maybe even turn negative like the 30-year Swiss bond just did.

2. Always raise interest rates faster than housing prices fall. Push those prices low enough and people won't need a mortgage.

3. Always lower wages slower than housing prices fall. This one's tricky. It may feel like a deflationary depression. Been there, done that. Again.

4. Always raise wages faster than housing prices rise. This one's also tricky. It's tough to stop the bidding wars once workers have good money coming in. Then again, maybe much of the bidding will be confined to canned goods, toilet paper, ammunition, oil, and precious metals instead. In the name of housing affordability, one can always hope!

Surely, with the government's help of raising and lowering interest rates and wages randomly, some combination is eventually bound to create stable, affordable housing. Or not.

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