Roy Zesch (@RoyZesch)

Affordable housing There is lots of talk about “affordable housing” today and people trying to come up with simple solutions to a complex problem. I think the basic economics of the law of supply and demand give us all the big picture easily. The law of supply and demand teaches us that if supply goes up then prices will drop. So with that understanding what would happen if the supply of workers goes up with many more women entering the workforce? Prices(wages) will go down. That doesn’t tell us if women entering the workforce is good or bad, it just tells us that wages will be driven lower by excess supply of workers. What would happen after the immigration act of 1965 if the supply of workers goes up? Again prices(wages) will go down. That doesn’t tell us if immigrants entering the workforce is good or bad, it just tells us that wages will be driven lower by excess supply of workers. What would happen to home prices if the demand goes up due to immigration? Home prices will rise. That doesn’t tell us if immigrants needing housing is good or bad, it just tells us that home prices will be driven higher by and increase in demand. So with just these 3 data points we can easily see what has happened to affordable housing. Wages have been driven down due to more workers available. Home prices have gone up due to more people needing houses. This is before you look at the effects of greater taxation, regulations driving up the cost, zoning restrictions, interest rates, etc. Building smaller houses on smaller lots can never get to the root of the problem. These things have driven housing prices up much faster than income of the people trying to buy houses. The question to ask yourself is who benefits from these changes and what have they been lobbying for in DC?