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Cyclical Housing Markets and Homelessness
Author(s) -
Harrison Fred
Publication year - 2020
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/ajes.12322
Subject(s) - boom , bust , economics , real estate , government (linguistics) , poverty , action (physics) , development economics , market economy , economic policy , economic growth , finance , linguistics , philosophy , physics , quantum mechanics , environmental engineering , engineering
The fundamental explanation of homelessness has eluded governments that claim to operate with “evidence‐based policies.” The underlying cause of most homelessness is inherent in land markets, which are subject to wide swings of speculative manias followed by debilitating depressions. Rather than seeking to rectify the economic roots of homelessness by altering the tax treatment of real estate, governments focus on ameliorative strategies that are destined to fail. Cycles of boom and bust in land markets have persisted since the 19 th century. They exacerbate homelessness by pricing low‐income renters out of the market during the upswing, as land prices rise, and by generating massive foreclosures and evictions during the downswing. The most important action government could take to remedy the problem of homelessness is to devise policies to dampen the swings in land prices.