I’m not sure I agree that lower housing costs wouldn’t represent a boost to productivity.
UK average household spend on housing is ~17%:
In London rents are a much higher percentage, somewhere between 45-50%. (Will update with the exact number and a source later.)
Understood as a pot of money that could otherwise be spent on other things, I’m not sure I buy that lowering housing costs wouldn’t boost the economy.
Excessive housing costs create negative spillovers that hurt productivity in other sectors. If workers have to commute longer because they can’t afford to live near work, that reduces their available working hours. If businesses can’t attract workers because of high housing costs, that constrains their output. If consumer spending is constrained by high rents, that reduces demand (and thus production) across the economy.
It’s possible that these spillovers aren’t occurring – this comment doesn’t constitute proof – but basic economics would suggest they are.
I’m not sure I agree that lower housing costs wouldn’t represent a boost to productivity.
UK average household spend on housing is ~17%:
In London rents are a much higher percentage, somewhere between 45-50%. (Will update with the exact number and a source later.)
Understood as a pot of money that could otherwise be spent on other things, I’m not sure I buy that lowering housing costs wouldn’t boost the economy.
Excessive housing costs create negative spillovers that hurt productivity in other sectors. If workers have to commute longer because they can’t afford to live near work, that reduces their available working hours. If businesses can’t attract workers because of high housing costs, that constrains their output. If consumer spending is constrained by high rents, that reduces demand (and thus production) across the economy.
It’s possible that these spillovers aren’t occurring – this comment doesn’t constitute proof – but basic economics would suggest they are.