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Stephen Hoskins's avatar

Nice post Cam. I think the declining rent share over income quintiles really demonstrates that rent burdens are primarily a problem of inequality. And public housing can combat that for low-income households while also providing the benefits of an outside option.

One thing that's missing with these measures is the size/location/quality of the housing that's being purchased. Where upzoning increases central densities, it can help people move to higher-amenity locations, even while their housing spend doesn't necessarily fall. I wonder whether a [% of income spent on housing & commuting] could be crude improvement on the above measures (and whether those would also be flat)? Or combining them with metrics on average floorspace & time spent commuting?

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Bruce Bradbury's avatar

Part of the difference between the cross-sectional and time-series income elasticity comes from land being a positional good. If my income increases, but no-one else's does, I might move to a better location and pay more rent. If everyone's income increases we can't all move to a better location, and we will just bid rents up.

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