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Who else can share the blame for the housing bubble? How about urban planners? Differences in...

Who else can share the blame for the housing bubble? How about urban planners? Differences in growth management may explain why California and Florida bubbled, but Georgia and Texas didn't - and may point the way to preventing the next one.
Comments (16)
  • tripleblack
    , contributor
    Comments (13507) | Send Message
     
    "Urban Planners"? Sounds oddly familiar...

     

    How about Community Organizers?
    2 Oct 2009, 06:12 PM Reply Like
  • spald_fr
    , contributor
    Comments (2728) | Send Message
     
    Fannie, Freddie, Barney, Emmanuel, Dodd, Franklin.
    2 Oct 2009, 06:24 PM Reply Like
  • Not_a_planner
    , contributor
    Comments (183) | Send Message
     
    Is it in high school that we learn about correlation vs. causation?

     

    randall o'toole is pathalogical in his dislike of urban planners yet if you bring up the issue of restrictive zoning he is oddly silent

     

    City Planners have little power. Housing supply is restricted in some places because "the people" get together under the guise of zoning and restrict development. This causes prices to rise
    2 Oct 2009, 06:29 PM Reply Like
  • stockferret
    , contributor
    Comments (119) | Send Message
     
    The only thing more amazing than the fact that someone gets paid to write this idiocy is that people believe it. I suppose the answer to eliminating all bubbles is to never produce anything of value. That way the price can't possibly go up because no one will be willing to pay for it. Millions of houses in the middle of nowhere that will never appreciate in value because you can easily build another exactly like it anywhere you want. Of course, the house will never be sellable either since it is easier and cheaper to build a new one. But hey! No bubble!
    2 Oct 2009, 06:32 PM Reply Like
  • Not_a_planner
    , contributor
    Comments (183) | Send Message
     
    randall o'toole

     

    The only other thing I will say is certainly under the currrent system if you draw a line around the a region and don't allow growth prices go up. O'toole hate this

     

    If you don't allow mutli family homes in suburds, or house under a certain lot size, or higher densities in a city neighborhood this would also cause prices to rise. O'toole never address this and deflects if you ask about it

     

    Sprawl is fine but a home is worthless without access and services for the most part. O'Toole deflects on this question as well
    2 Oct 2009, 06:41 PM Reply Like
  • Niner
    , contributor
    Comments (791) | Send Message
     
    I think it was because Georgia and Texas have an "e" in their names and Florida and California don't.
    2 Oct 2009, 07:04 PM Reply Like
  • E Thomas St.
    , contributor
    Comments (139) | Send Message
     
    Georgia most certainly did bubble or are we not counting the bank failures as a symptom of a bubble?
    2 Oct 2009, 07:29 PM Reply Like
  • jpiretti
    , contributor
    Comments (712) | Send Message
     
    California (San Diego), Florida (S.E. Condos), Phoenix and Las Vegas are all similar in the fact of the huge mortgage extraction (cash out refinancing) that existing homeowners used to leverage back into the RE market for speculative reasons. They got it coming and going. You could take the nominal national GDP growth from 2003-07 and almost match it up dollar for dollar to mortgage extraction. If median family income was trending lower for 8 straight years, why did we assume we were in an economy that could survive without the mortgage ATM? Tax policy that promotes distribution but not R&D, product development, capital or infrastructure spending has got to change for the US to compete in the future.

     

    On Oct 02 07:04 PM Niner wrote:

     

    > I think it was because Georgia and Texas have an "e" in their names
    > and Florida and California don't.
    2 Oct 2009, 08:08 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6774) | Send Message
     
    I take it that you mean the organizer of community organizers, Barack Obama.

     

    On Oct 02 06:12 PM tripleblack wrote:

     

    > "Urban Planners"? Sounds oddly familiar...
    >
    > How about Community Organizers?
    2 Oct 2009, 08:45 PM Reply Like
  • inthemoney
    , contributor
    Comments (981) | Send Message
     
    Texas didn't bubble because of there is lots of land, (illegal)construction labor is cheap and property taxes are high. I pay more in property taxes than my mortgage . Of course, I don't want a big expensive house.
    2 Oct 2009, 08:47 PM Reply Like
  • Mr. Ed, Jr.
    , contributor
    Comments (745) | Send Message
     
    Urban planners did not cause the housing bubble, but might well have aggravated the problems in some areas-- AFTER the frenzy was well underway.

     

    The housing bubble starts slowly enough.... the local media begins to do more and more stories on how prices are rising x % per year...then per month...and as the prices keep rising, greed and fear-- fear of being left behind-- take over.

     

    But it would not matter much that home prices were rising if access to buying a home was limited to only those with 20% downpayment, decent credit and a job with enough income to pay the mortgage (or, perhaps at least one of those), because there would not be enough qualified buyers to create or support a frenzy.

     

    Nobody was getting turned down for a home loan, no matter how ridiculous their credit risk. That was the fuel that launched the insanity into orbit, not urban planning, which could only, at some point in some areas, exacerbate a localized problem. The housing bubble was blown in many areas that did not have particularly restrictive planning, because it was all about buying houses-- any houses.

     

    There will be many more theorists who come along to tell us that extremely loose credit was not the cause-- that it was (fill in the blank). But they will be wrong. There were many contributing factors, but without the ridiculous lending, there could be no frenzied, house-buying insanity.

     

    Now, all we have to do to find the culprits is trace back to where those idiotic lending standards originated. There are plenty of criminals' fingerprints all over this mess, and in November, 2010, you will find their names on your ballot, identified as "incumbent" .
    3 Oct 2009, 02:33 AM Reply Like
  • TradingHelpDesk
    , contributor
    Comments (538) | Send Message
     
    Fascinating discussion. But California could have more foreclosures than say Texas for a bunch of reasons; local industry lay-offs, weaker local regulation, higher local supply versus demand, the poor condition of State finances preventing community help, different culture towards property ownership and materialism, weaker local banks (forcing them to squeeze home-buyers in arrears earlier). The micro and macro economic list is endless.

     

    Great article.
    3 Oct 2009, 02:51 AM Reply Like
  • jpiretti
    , contributor
    Comments (712) | Send Message
     
    California's balance sheet has suffered since the 70's and Prop 13.

     

    On Oct 03 02:51 AM TradingHelpDesk wrote:

     

    > Fascinating discussion. But California could have more foreclosures
    > than say Texas for a bunch of reasons; local industry lay-offs, weaker
    > local regulation, higher local supply versus demand, the poor condition
    > of State finances preventing community help, different culture towards
    > property ownership and materialism, weaker local banks (forcing them
    > to squeeze home-buyers in arrears earlier). The micro and macro economic
    > list is endless.
    >
    > Great article.
    3 Oct 2009, 08:10 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8754) | Send Message
     
    I agree, Mr. Ed. Blaming urban planners for the housing bubble is like blaming pretty women for gonorrhea. Urban planners may try to help create an urge, but with the funding there is no point of contact.

     

    On Oct 03 02:33 AM Mr. Ed, Jr. wrote:

     

    > Urban planners did not cause the housing bubble, but might well have
    > aggravated the problems in some areas-- AFTER the frenzy was well
    > underway.
    >
    > The housing bubble starts slowly enough.... the local media begins
    > to do more and more stories on how prices are rising x % per year...then
    > per month...and as the prices keep rising, greed and fear-- fear
    > of being left behind-- take over.
    >
    > But it would not matter much that home prices were rising if access
    > to buying a home was limited to only those with 20% downpayment,
    > decent credit and a job with enough income to pay the mortgage (or,
    > perhaps at least one of those), because there would not be enough
    > qualified buyers to create or support a frenzy.
    >
    > Nobody was getting turned down for a home loan, no matter how ridiculous
    > their credit risk. That was the fuel that launched the insanity into
    > orbit, not urban planning, which could only, at some point in some
    > areas, exacerbate a localized problem. The housing bubble was blown
    > in many areas that did not have particularly restrictive planning,
    > because it was all about buying houses-- any houses.
    >
    > There will be many more theorists who come along to tell us that
    > extremely loose credit was not the cause-- that it was (fill in the
    > blank). But they will be wrong. There were many contributing factors,
    > but without the ridiculous lending, there could be no frenzied, house-buying
    > insanity.
    >
    > Now, all we have to do to find the culprits is trace back to where
    > those idiotic lending standards originated. There are plenty of criminals'
    > fingerprints all over this mess, and in November, 2010, you will
    > find their names on your ballot, identified as "incumbent" .
    3 Oct 2009, 08:24 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8754) | Send Message
     
    I don't think the problem is entirely the creation of bubbles; but the FED is supposed to be on the lookout for bubbles, and neutralize them. Our FED leaders actually actively created bubbles, and was proud of what they were doing. Their insight into nature, human nature, and physics was paltry at best, and perhaps criminal in its intent.

     

    How do you deflate an asset bubble: you raise interest rates.

     

    On Oct 02 06:32 PM stockferret wrote:

     

    > The only thing more amazing than the fact that someone gets paid
    > to write this idiocy is that people believe it. I suppose the answer
    > to eliminating all bubbles is to never produce anything of value.
    > That way the price can't possibly go up because no one will be willing
    > to pay for it. Millions of houses in the middle of nowhere that
    > will never appreciate in value because you can easily build another
    > exactly like it anywhere you want. Of course, the house will never
    > be sellable either since it is easier and cheaper to build a new
    > one. But hey! No bubble!
    3 Oct 2009, 08:27 AM Reply Like
  • tripleblack
    , contributor
    Comments (13507) | Send Message
     
    ACORN, actually, but "urban planning" and "community organizing", given the history with CitiBank, etc, are in the same ball park, in at least a darkly humorous way if not otherwise.

     

    Unlike the thumbs-downers, I see a link between the side-effects (if not the overt goals) of these groups and the problems which resulted (and continues, despite recent history). At the very least their impact ON actual "urban planning commissions", which are political entities reacting to the same stimuli which creates so much pain for so many inhabitants of the cities they "plan", is real.

     

    LOL, but the similarities I see in the two very different group's titles was the word play, if not the literal burial of the very idea that both groups are rarely mentioned but might well be two of the underlying problems in need of remedy.

     

    Note that just your question will receive excessive negative feedback, like a microphone held too close to a speaker.

     

    Oh, and to be on point with the topic, I once worked in the urban planning business, under a well-known planner who sought for decades to rail against the "big box" planning method, seeking to educate the commisions and town councils in the way healthy human neighborhoods work, vs, gigantic block zoning that destroys neighborhoods and forces everyone into their cars for long trips to perform even the simplest tasks...

     

    In a sane universe, both Urban Planners and Connunity Organizers would be focused on the later, rather than the former.

     

    On Oct 02 08:45 PM Graham and Dodd Investor wrote:

     

    > I take it that you mean the organizer of community organizers, Barack
    > Obama.
    3 Oct 2009, 10:24 AM Reply Like
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