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Cyclical Housing Markets and Homelessness

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  • Fred Harrison

Abstract

The fundamental explanation of homelessness has eluded governments that claim to operate with “evidence‐based policies.” The underlying cause of most homelessness is inherent in land markets, which are subject to wide swings of speculative manias followed by debilitating depressions. Rather than seeking to rectify the economic roots of homelessness by altering the tax treatment of real estate, governments focus on ameliorative strategies that are destined to fail. Cycles of boom and bust in land markets have persisted since the 19th century. They exacerbate homelessness by pricing low‐income renters out of the market during the upswing, as land prices rise, and by generating massive foreclosures and evictions during the downswing. The most important action government could take to remedy the problem of homelessness is to devise policies to dampen the swings in land prices.

Suggested Citation

  • Fred Harrison, 2020. "Cyclical Housing Markets and Homelessness," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(2), pages 591-612, March.
  • Handle: RePEc:bla:ajecsc:v:79:y:2020:i:2:p:591-612
    DOI: 10.1111/ajes.12322
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    References listed on IDEAS

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    1. Katharina Knoll & Moritz Schularick & Thomas Steger, 2017. "No Price Like Home: Global House Prices, 1870-2012," American Economic Review, American Economic Association, vol. 107(2), pages 331-353, February.
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    Cited by:

    1. Rini Rachmawati, 2021. "Urban Development, Land Use, and Spatial Planning for Settlements: Lessons Learned from Yogyakarta City, Indonesia," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 757-775, March.
    2. John Pullen, 2021. "Government Infrastructure Investment Dividends and Urban Development," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 721-745, March.
    3. Yung Yau & Tin Choi Cheung, 2021. "Revisiting the Concept of the Property State: Private Landowners and Suburban Development in Hong Kong," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 427-464, March.
    4. Josh Ryan‐Collins, 2021. "Private Landed Property and Finance: A Checkered History," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 465-502, March.

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