Trickle Down Housing Isn’t a Thing – GWC Mag

It shouldn’t come as news to anyone that we have an ongoing housing crisis in the U.S. More to the point, we have an affordability crisis, further exacerbated by inflation, restrictive zoning, and income inequality numbers that make the Gilded Age seem quaint by comparison. Solutions to this endemic problem continue to elude even the wisest among us.

In a recent article for the Financial Times, data journalist John Burn-Murdoch adopts a rising-tide-lifts-all-boats approach to the housing question. “If you want to improve housing availability and affordability for all, the good news is that any new housing will help,” he writes. Burn-Murdoch would have us believe that housing operates similar to any other commodity, like cement, aluminum, and lumber. When supply chains were massively disrupted starting in 2020, the prices of these very materials went up. And when there’s a surplus of these things, prices drop and market forces stabilize – fundamental principles of supply and demand in action. So, why would it be any different for housing, Burn-Murdoch asks. He’s just another pragmatist yelling into the void, right?

There are two problems with his argument. The first is this: Burn-Murdoch thinks he’s making a very straight-forward, supply-side economics case for why more housing (any housing!) is the engine that will drive down costs and make housing more accessible for all. He even takes a crack at so-called “supply skeptics” (those who believe more market-rate housing will adversely impact accessibility to housing for middle- and low-income earners) by lumping them together with the suburban NIMBY crowd, who simply don’t want affordable housing units within shouting distance of their slice of the American dream.

Trickle-down economics and housing affordability

But Burn-Murdoch’s argument doesn’t hinge on supply-side fundamentals. Rather, it’s based on trickle-down economics, that Reagan-era bastardization of…