As we discussed at the Texas Lyceum, the big trick is to invert our thinking away from institutions and back to individuals. The aggregation of individuals can be more dramatic than the siphoning of energy from government.

I point folks back to your blog post in November 2006, where we discussed the article I had published at the Lyceum conference:

http://www.creativeclass.com/_v3/creative_class/2006/11/14/beyond-schools/

With the leadership of the Creative Class, we can create 21st Century models for solving problems.

Gary Thompson
Austin, Texas

But I’m referring to locations that have land available for single-family homes, not in the middle of a inner city. The folks that are moving to an inner-city location, are moving for that urban experience, not because they like condo living.

I was responding to Hayden’s theory that “the condo boom is a testament to the reality that people want mobility and easy urban living.” This may be true for a small number of people but overall, people want a) a single-family home, b) as large as they can afford, and c) as much land as they can afford.

An increasing number of people seek the vibrancy of inner-city urban living, and I find it attractive too. But I’m not likely to find a single-family home downtown, hence the condo or apartment route. Similarly, you don’t find many condos surrounded by cornfields.

And during the recent housing boom, condos become the only way for many people to afford their own shelter, and the rapid price increases only encouraged them to buy. Now in some cities, condos are offered at huge discounts yet they still remain unsold. The reason is that, for better or worse, the American public still wants their home as a stand-alone castle.

Best, Bert

I’m sorry, but this is absolute crap.

There is no one in “the government” that is competant to do this.

Government is not a big venture capitalist with a no-limit credit card. It’s a bunch of bureacrats with access to information no better than that available to you or me. Sounds like a recipe for disaster.

Remember, what you are talking about is nothing more than industrial policy. It’s is done everyday around the world, most famously in Japan in the 1980s. There is no evidence that it works any better than the free market, and a lot of evidence that, in the case of Japan, it didn’t work at all.

I respect your insights, so I’m wondering what I’m missing when you say “I can’t think of one place where condos were developed and sold, where sufficient reasonably-priced land was available for single-family homes.”

What about Portland’s famous Pearl District, where I personally know at least four people who have sold houses to move to condos? Or South Waterfront where a newly together couple I know are selling two houses to buy a condo? Granted my friends tend to be middle aged, but I suspect the 30-somethings who bought in the Pearl could have gotten houses for the same money.

(actually, we don’t say that in Oregon, at least not in Portland. But I’m amused at the notion that we’re a bunch of hillbillies in fleece overalls.)

Best, Bert

Au contraire (as they say in Canada.)

The condo boom was a response to unaffordably-high home prices, often the result of unrealistically high prices. Or condos and apartments are the outgrowth of inner-city living where single-family housing is unavailable.
I can’t think of one place where condos were developed and sold, where sufficient reasonably-priced land was available for single-family homes.
And I predict mobility will decrease, not increase, in the coming winter of higher fuel prices.

Bottom line – if you want to predict the future, look to the past. Boring and frustrating, but true.

But things will change over the long term, and in ways that we probably cannot logically foresee. Here’s something to remember – we tend to overestimate the extent of change in the short term, and underestimate the change in the distant future.

Still waiting for my jet pack,
Bert

I am not calling for government to take the lead here. I recognize that they, along with the private sector, is complicit in thsi situation. Yes, Fannie and Freddie and the tax incentives and the rampant and mindless infrastructure underwriting. And I realize that what we’re likely to see is more of the same.

What I’ve been trying to sort out in a forward looking way, and why all of these comments are so valueable, is that if massive government stimulus is coming (there seems to be consensus that it is) what form should it take. I’m simply trying to identify what kinds of investments (as inefficient as they will be) would be most likely to reset the conditions for renewed and sustainable economic growth. These cannot continue to prop up the current system (many of these assets must be allowed to fall in price particularly those bound up with the housing-auto complext) and must create new avenues for investment, consumption and demand. The system must become cheaper, more efficient and more rationalized before a new cycle can be set in motion.

No one (no government, no single private sector body, no one) can know this in advance. It will evolve out of many experiments, in fits and starts. But sooner or later, some place or places will begin to find itself doing the next-best things …