Here’s The Problem With Housing

Implications: The factors outlined show that the growth in family income is being outpaced by the growth in family expenses. Something’s got to give and it will be the cost of housing that leads the giving. There aren’t many ways to get the family income up anymore now that the college degree is a standard and women are at parity with men in middle management. Housing prices will fall on a real basis to reflect this reality.

Analysis:

This means that the master plans in every city are in trouble. Any plan underway now must be revised for greater density, smaller units and lower prices. Not only does this re-planning cost a bundle, but the re-designs place a financial stress on the community providing services. No matter whether the money comes from the private or public sector, the budget for paying the bills for health, welfare and safety must be paid out of a balanced budget on a cash basis or municipal bankruptcy occurs.

At the same time, the old standbys for keeping the civic income in balance, shopping centers and hotels, are going to be biting a bitter bullet too. Residential property taxes aren’t going to be increasing at rates seen in recent years either. We’re not going to increase the per capita square footage of retail space on an even basis between communities and it’s likely that our consumerism is going to wane with our reduced financial outlook. We’ve probably seen the greatest growth for the next decade in the hotel business already, so this industry is not going to help proportionately.

We’re going to go to such as manufacturing, agriculture and alternative fuels for our domestic growth. The coastal areas will continue to thrive as they provide international finance and services. Look for us to start new industrial cities too in addition to a re-design of our plans to provide more industrial acreage. Sounds to me like good times are coming to the Rust Belt, the Great Plains, California’s Central Valley, the Corn Belt and great portions of the depressed South.

We’ll be great international competitors with the revitalization of our basic industries. We’re environmentally clean, reasonably non-corrupt, capitalized and energetic. Even though we may be a high cost producer, our goods should be acceptable especially where complex designs are involved. I’m not sure why I say this for the future when we generally produce such poor domestic automotive products, but I have faith in the American engineer and laborer if given a high quality management stressing product quality and state of the art design.

It’s the American way all over again. If you don’t like what you have in the United States, just wait a few and better times will be right around the corner. It seems like a corner is in sight now.