by Brooke Medina
Vice President of Communications, John Locke Foundation
Inflation has reared its ugly head at the gas pumps and grocery aisles, to be sure, but one of the biggest ticket items on the Inflation Wheel of Misfortune is housing.
According to a new paper published by the National Bureau of Economic Research (NBER), “housing will make a significant contribution to overall inflation in 2022” and economists expect it to remain elevated in 2023.
|From January 2021 to January 2022, home prices increased 19.9% and rent rose 14.9%. For many, wages have not kept up with these skyrocketing prices, which have been exacerbated by foolhardy fiscal policies, including the Federal Reserve’s decision to pump inordinate amounts of money supply into the market. |
Of the Feds irresponsible enabling of Congress’ fiscal gluttony, North Carolina businessman and entrepreneur Bob Luddy writes, “Never in the history of America has our government in its ineptitude created such a false economy, risking hundreds of years of hard work on unsound and unworkable economic policies.”
He goes on to note, “reckless spending is a prime example of why all government interventions fail and lead to more interventions, namely endless trillion-dollar spending. The Federal Reserve enables this spending with money printing.”
At the local level, we can start by expecting better zoning that doesn’t needlessly discriminate against types of homes. Not everyone needs a single family dwelling. Apartments, duplexes, accessory dwelling units (ADUs) all make for affordable alternatives. City leaders who refuse to allow smart-sized homes are pushing would-be taxpayers out of their city limits when they bar multi-family housing.
At the state level, bills that legalize “middle housing,” like duplexes and townhomes should receive a hearing. In addition, bills that recognize North Carolina property owners’ right to build ADUs and backyard cottages are long overdue. The balance of power between property owners and their local governments has been skewed for far too long.
And, at the federal level, the money printer needs to stop going “brrrr.” One cannot ignore the laws of economics and not expect to eventually pay the price. Irresponsible printing distorts markets and leaves Americans poorer in real terms. It’s fiscal malpractice.
This problem was not created overnight and we’re not going to immediately solve spiking housing costs with the flip of a switch. It’s going to take smart, innovative policy acumen and courage at the local, state, and federal levels. But it is possible to right the ship, if we begin to demand better of our elected leaders.