• Affordable-housing shortage Affordable-housing shortage By R.S. Weir Mr. Lewis concludes his uneconomic screed with the preposterous claim that the affordable- housing shortage cannot be addressed by reflecting and then acting upon proven economic laws. No, Lewis instead calls for
• Affordable-housing shortage
Affordable-housing shortage
By R.S. Weir
Mr. Lewis concludes his uneconomic screed with the preposterous claim that the affordable- housing shortage cannot be addressed by reflecting and then acting upon proven economic laws. No, Lewis instead calls for an examination of what Barbara Elmore and others have suggested. This is nothing more than regurgitated socialist rhetoric pleading for more government, punctuated with inane and nonsensical “we need” comments. A more recent letter by LaVerne Bessert joins in the chorus of more government control please — but with private cooperation, of course!
Thirty-four years ago, after completing graduate studies in economics, I returned to Kaua‘i, and surprise, surprise, what was the controversy du jour? Affordable housing; the solutions offered? Government intervention, regulation, general plans and affordable-housing mandates. How is it that so many years later, and in the face of all the evidence accumulated over those years, that government has utterly failed to provide any relief, in fact has made the problem worse, we hear the pathetic whining that “we need” more of the same? The Soviet Union toppled under the weight of an inefficient, corrupt, command-and-control, centralized economy; is this what America wants?
To understand this one must remember that most people are accessible to new ideas only in their youth. With the progress of age, the ability to welcome them diminishes, and the knowledge acquired earlier morphs into dogma. An especially bad situation when the knowledge so converted is wrong and leads to misery for some. In addition to this inner resistance, there is also the opposition that develops out of concern for external considerations. A man’s prestige suffers when he sees himself obliged to admit that for a long time he has supported a position that is now factually proven as mistaken. Moreover, these old, false notions are passed along to succeeding generations through repetition of the mantra, ensuring that error and the consequent dissension are perpetuated at the expense of truth and resolution.
In his attempt to discredit any discussion of waiving or revoking zoning laws Lewis resorts to logical fallacy — the red herring, a.k.a. the smoke screen. Invoking the horror of chemical plants, hog farms and junk yards “next to our residences” replaces a reasoned, rational approach to the issue. He conveniently ignores that the study from which I quoted concluded that the pattern of land use in Houston, which has no zoning laws, is substantially the same as any large American city with zoning laws — the main difference being that Houston has an abundant supply of low- and middle-income housing. If Lewis’ smoke screen had any merit, how does he explain that the citizens of Houston have, consistently, voted down attempts by politicians to enact zoning laws? Moreover, he should be reminded that the common law recognizes the concept of nuisance and is there to provide a remedy if one’s property rights are violated by the actions of others.
Lewis goes on to display a particularly shallow grasp of economics by declaring that “land is not a commodity, and its supply is not flexible.” Economics, broadly considered, is the study of how society through human action allocates scarce resources, also called the factors of production. There are only three factors of production: land, labor and capital. Land is the most abundant — that is the least scarce — of the three.
Land is, and has been for many centuries, a commodity. Its treatment in economics is handled no differently than any other factor, factor derivative, secondary good or service. Grasping the extent and scope of land as a factor and commodity is easy with a little reflection and observation of all that is around you. Every product you see has a huge proportion of land or land extraction resources in its production mix — wood, paper, metal, plastics, housing, water, cement, fuel etc. (Lewis is encouraged to look at the classified section, especially for O‘ahu, if he thinks that real estate —land — is not a commodity.) All these uses are, indeed must be, facilitated and protected by private property rights; carrying on exchange or trade of any type without them is impossible by definition.
Lewis errs by looking at land as one huge undifferentiated mass; this leads him to the uninteresting, commonplace conclusion that the supply of land is inflexible — a purely inventory, as opposed to economic, approach. This conclusion is uninteresting and useless because it is obvious that all resources, not just land, are finite — you know, scarce at some point in an absolute context. Economically, however, there many different, competing classes and uses for each of the three factors of production; it is in this regard that the supply of land must be considered to be of any real or practical use. For example, the supply of land for housing lots is certainly not static when a free market, unimpeded by government edict and regulation, is flourishing. Market prices determined by the interaction of supply and demand will ensure allocation of the right amount of land to the low- and middle-income sectors, as it will to all other classes of land. If the price of housing lots starts to move upwards, land use will flow away from less profitable uses such as on marginal agricultural pieces and into the housing market which ultimately stabilizes or drives down prices. This is what the government prohibits. This is not “touching, but misplaced” faith as Lewis claims; it is, instead, based on solid, economically logical grounds and substantiated by centuries of experience.
Mr. Lewis earns an “E” for effort and takes a seat with the aforementioned others at the back of the class.
R.S. Weir is a resident of Kapa‘a
