Saturday, August 30, 2014

She who is ignorant of economic history

Is condemned to repeat the same old nonsense for the San Francisco Chronicle;
"We're anticipating displaced families and individuals, and we're anticipating a shortage of homes," said Pablo Zatarain, a program manager at Fair Housing Napa Valley. "The rental market in Napa was already very short on housing, and we expect this to be a problem in the short term while people search for temporary solutions."
Ho hum, another earthquake in the San Francisco Bay Area. Another newspaper reporter--Vivien Ho--who missed the famous 1946 article by George Stigler and Milton Friedman--Roofs or Ceilings, that begins with the story of the housing non-shortage in San Francisco after the April 1906 massive earthquake and fire that destroyed roughly half the housing stock in that city.

The two economists point out that the first edition of the San Francisco Chronicle published after the earthquake (in May), contains not a single mention of a housing shortage!

The reason (obvious to an economist) is that housing markets were unhindered by government regulation back then. So, even without Craig's List, the people of San Francisco re-allocated their housing amongst themselves. Even the poor found lodgings, without the kind of wailing and gnashing of teeth today's Chronicle readers have to suffer through;
"Trying to find a new place at an affordable price, it's a huge concern for us. And now we've got to compete with everybody else needing immediate housing."
Exactly as San Franciscans had to over a century ago. Without;
If federal disaster assistance comes through, homeowners can apply for cash aid. Renters without insurance will only be eligible for low-interest loans.
"A loan!" [Sarah] Sandbek [the 38-year-old owner of a touring company called Sommelier on Wheels.] scoffed, gesturing toward the destroyed building. "This wasn't even our fault. But now we can go into debt over it."
Thank California politics for that, Sarah.

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