I know it sounds like free market dogma, but I swear this is true: supply grows to meet demand. Airbnb will just encourage more housing to be built, by creating a new short term housing market that until now had not existed.
Right but there's no shortage of mountains where new towns can be built. If people really want to live in mountain towns, the market can meet that demand for pretty much any number of people.
And, in fact, there are tons of "mountain towns" where real estate is cheap. They just aren't chi-chi mountain towns with cute coffee shops and gourmet restaurants often associated with world class ski areas.
What if they spent all their savings on rent and then lost their jobs due to automation, productivity gains needing less workers, or immigration (workers willing to work for less)?
Supply grows to meet demand, but what if the demand side has no money left? I think a lot of these "timeless" rules of thumb are going to be discovered to be not so timeless after all.
There is no evidence that the middle class is being impoverished by automation. Automation has the effect of increasing wages. It's the sole reason wages today are 20X what they were 200 years ago.
In any case, this is completely unrelated to housing usage patterns.
If you ignore all the unemployed people that are not classified as unemployed, you're right. Good thing to know there are literally no knock on effects from automation, it's just gravy for everyone.
But there is no reduction in the aggregate number of jobs.. Of course jobs are destroyed and created as the economy changes. That's always been the case and always will be. But the net effect of automation is more wealth being generated, which shifts the demand curve for labour to the right, causing wages to increases.
Globally, median wages are increasing at their fastest rate in history [1]. Wage growth for the middle class has stagnated in the US, but not nearly as much as some people (myself included, until recently) believe [2]. The primary cause of this slowdown in wage growth is slowing productivity growth [3], while the major secondary cause is growing income disparity. Growing income disparity can be traced [4] directly to growth in regulatory restrictions that impede the free market, and not automation or technology.
3) Ignores unemployment. "Most importantly, the growth in the average real wage is largely determined by improvements in labor productivity, output per worker hour."
4) Partially true (I very much agree with the protectionist immigration point), but there are many issues with that article as well.
The trick is, what kind of jobs are being destroyed and created.
With current wave of automation, unskilled jobs are being destroyed, and specialized jobs are being created. The people leaving the former can't access the latter.
In many mountain towns (like the one I just relocated from), supply is more or less permanently fixed due to constraints on land and water.
Often they are bordered by Federally or state owned land, and have limited supplies of water due to the simple fact that they are on top of a mountain and there is only so much water in the natural aquifers.
Building taller buildings and using water more efficiently will only get you so far...
Your point is valid, but I think it doesn't give enough credit to technological innovation and market forces. We've figured out how to do pretty amazing and ridiculous things with the right incentives in place in the past, and I'm not sure what about this problem would classify it as impossible.
To phrase it more glibly: "Necessity is the mother of invention."
Have you seen the rise in house prices around most of the western world over the last 30 years? In particular in cities and high demand places? Growth in supply is a fraction of the increase in demand.
reply