[danhak]

> Housing is a function of city council zoning policy...

This is the laughably reductionist take that predictably appears on HN when folks think the dynamics of San Francisco apply everywhere.

Housing costs have nothing to do with the Fed? Really? You don’t believe record low mortgage rates are driving demand at all?

Nah, it must be city council zoning policy that is sending home prices soaring all over the country—-even in rural and unincorporated areas.

[arcticbull]

I'm sorry you're just wrong about that though.

On average, the price per square foot of housing in the US is exactly the same now as it was in the 1970s, on an inflation adjusted basis. [1] In major metros, that number is higher, because of city policy, but on average, the number is flat. That means on an inflation adjusted basis in rural areas houses are cheaper per square foot.

Once you take into account that interest rates are about 1/5th of what they were back then, it's clear, housing is actually more affordable now than it ever was (per square foot).

Yes, zoning matters in rural areas. Minimum size rules, minimum setback rules -- all sorts of code changes -- have conspired alongside the 20% decrease in average family size and the changing tastes for more space, to make houses twice as big. Same price per square foot -- or lower! -- Twice as big. Twice as expensive.

I was wrong to say it has "nothing" to do with it, but it is by far not the dominant force as evidenced by the numbers.

If you're unhappy about poor folks not being able to afford the houses that's again social policy not monetary policy. I am too. But inflation isn't why.

By all means have at those windmills though, and please, cite your sources so we can have a debate on facts.

[edit] You're missing my point. Pricing in metros is more expensive because of council policy. Pricing outside the city is higher because they're twice as big. End of story. Please CITE YOUR SOURCES. This. Is. Not. Inflation.

You having a worse quality of life is not inflation.

Yes, white flight may or may not contribute to it. That's not Fed policy. That's social policy. And that's my point.

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

[imcoconut]

You're not necessarily wrong that the causes of the increases in prices for things like healthcare, etc. are due to policy issues, among other things. But you can kind of make that argument for any good or service - that that the increase in the price of x is a "specific industry/policy issue" and not a "monetary issue".

That doesn't negate the fact that people are still paying higher prices. If the fed is mandated with controlling the increase in prices then it is still upon them to address it, no? The fact that monetary policy is not a primary cause of the good/service specific inflation is irrelevant.

[arcticbull]

> That doesn't negate the fact that people are still paying higher prices. If the fed is mandated with controlling the increase in prices then it is still upon them to address it, no? The fact that monetary policy is not a primary cause of the good/service specific inflation is irrelevant.

If 'everything is going up the same amount' then sure. If one particular contributor makes an outsized move in the wrong direction what's the fed to do? Fire up the printer at the cost of all of the other areas of life that aren't going up?

Healthcare contributes to inflation, sure, but if government passes a 50% tax on all healthcare procedures overnight, that's not the Fed's job to rectify. It's not their job to fight Congress on how relatively expensive certain things are. If the government decides healthcare should only be for the rich (...er) then it's not the Fed's job to change that.

They would account for what the newly more expensive healthcare cost does to inflation as a whole, and increase or decrease the money supply to match.

Their job is systemic, not targeted. Want cheaper healthcare? Talk to congress, not Janet Yellen.

[imtringued]

>Housing costs have nothing to do with the Fed? Really? You don’t believe record low mortgage rates are driving demand at all?

Imagine if you are a bathroom remodeling company and people are building new bathrooms for $5k. You can build a bathroom for $4K. Suddenly the fed is loosening its monetary policy and people are building bathrooms like crazy with their bathroom mortgages. They are willing to pay $10k per bathroom but your costs didn't change. It's now extremely profitable to build bathrooms and that's exactly what you are going to do. You're going to hire lots of workers so that everyone can get their bathrooms. Turns out, a competitor does the exact same thing but they sell their bathrooms for $9k. Add more competitors and the price will be very close to the cost of construction.

Now replace the bathroom with the entire house. Suddenly you realize something. It's very difficult to find land to build your new house and even if you did you would have to upzone the property by tearing an existing property down and building a 2-3 story multifamily home there. Unfortunately, doing this is illegal in many places and where it is legal permits are being denied for arbitrary reasons.

You can't tell me that construction companies can't make money off new construction because the cost of housing is too low.

[SpicyLemonZest]

Rural and unincorporated areas have strict zoning too. Look at Tuolomne county (https://www.arcgis.com/apps/webappviewer/index.html?id=3e926...) for an example I could easily find a graphic for. The vast majority of privately-held land in the county is zoned RR (brown, 1 unit per 5 acres), AG (1 unit per 18.5 acres), or TPZ (1 unit per 37 acres).