Shut Out : How a Housing Shortage Caused the Great Recession and Crippled Our Economy

Shut Out; CONTENTS; Introduction; Part I: The Things We Didn't Know and the Things We Knew That Just Weren't So; Chapter 1: High Home Prices Are Caused by Limited Supply; Chapter 2: Our Unexceptional Bubble; Chapter 3: A Tale of Credit; Part II: What Really Happened; Chapter 4: How Rising Prices Cause More Rising Prices; Chapter 5: Migration and Contagion Cities; Part III: Symptoms of the Urban Housing Shortage; Chapter 6: Closed Access to Labor; Chapter 7: Broader Economic Implications of Closed Access Cities; Chapter 8: Closed Access and International Trade;Shut Out provides a much-needed correction to the causes and consequences of financial crises and secular stagnation. The United States suffers from a shortage of well-placed homes. This was true even at the peak of the housing boom in 2005. Using a broad array of evidence on housing inflation, income, migration, homeownership trends, and international comparisons, Shut Out demonstrates that high home prices have been largely caused by the constrained housing supply in a handful of magnet cities leading the new economy. The same phenomenon is occurring in leading countries across the globe. Gentrifying cities have become exclusionary bastions in the new postindustrial economy. The US housing bubble that peaked in 2005 is more accurately described as a refugee crisis than a credit bubble. Surging demand for limited urban housing triggered a spike of migration away from the magnet cities among households with moderate and lower incomes who could no longer afford to remain, causing a brief contagion of high prices in the cities where the migrants moved. In this book, author Kevin Erdmann observes that the housing bubble has been broadly and incorrectly attributed to various “excesses.” Policymakers and economists concluded that our key challenge was that we had built too many homes. This misdiagnosis of the problem, according to Erdmann, led to misguided public polices, which were the primary cause of the subsequent financial crisis. A sort of moral panic about supposed excesses in home lending and construction led to destabilizing monetary and regulatory decisions. As the economy slumped, a sense of fatalism prevented the government from responding appropriately to the worsening situation. Shut Out provides a much-needed correction to the causes and consequences of financial crises and secular stagnation. Shut Out CONTENTS Introduction Part I: The Things We Didn't Know and the Things We Knew That Just Weren't So Chapter 1: High Home Prices Are Caused by Limited Supply Chapter 2: Our Unexceptional Bubble Chapter 3: A Tale of Credit Part II: What Really Happened Chapter 4: How Rising Prices Cause More Rising Prices Chapter 5: Migration and Contagion Cities Part III: Symptoms of the Urban Housing Shortage Chapter 6: Closed Access to Labor Chapter 7: Broader Economic Implications of Closed Access Cities Chapter 8: Closed Access and International Trade Chapter 9: A Moral Panic and a Financial CrisisEpilogue Appendix: Home Prices Notes About the Author Acknowledgments