Let us pause from gay-baiting fundraising letters, flat earther/scorched earther pronouncements, and blogger navel-gazing to consider some theoretical economics.
We’ve talked about the housing bubble at some length here at Bacon’s Rebellion. Today, Steve Landsburg, who writes an “Everyday Economics” column for Slate, speculated on the cause of the housing bubble.
While the cost of housing should be cost of land + construction costs + reasonable profit for the developer, there is a “mystery component” that is adding to the jacked-up prices being seen. Landsburg cites a University of Pennsylvania study that suggests this “mystery component” is a complex “zoning tax” that varies by locality.
Surprisingly, the areas included in the study omitted Northern Virginia, but did include Norfolk.
It’s thought provoking stuff for wonks and wonkabes.
