Brookings India hosted a Development Seminar on “Is housing an intractable problem?” with Prof. Richard K. Green, Lusk Chair in Real Estate and is Professor in the USC Sol Price School of Public Policy and the Marshall School of Business.
Abstract: All over the world, in rich countries and poor, housing is a problem. In rich countries it is too expensive, in the absence of subsidy, for those at the bottom of the income distribution. In poor countries, vast numbers lack access to infrastructure that makes housing healthy and accessible: electricity, sewer systems, clean water, and transport. The countries that best house their people—Singapore, Norway, New Zealand and Switzerland—are affluent and have small populations. This talk looked at the strengths and weaknesses of housing policy across a number of countries. It looked at the role of formal property rights, land use regulation, building permit processes, supply and demand side subsidies, and housing finance. It also discussed value capture as a technique for at once encouraging the construction of new housing while financing the infrastructure necessary to allow dwellers of that housing to be healthy and to have access to employment. While there are policies that do improve housing outcomes, one possibly intractable problem facing successful cities is latent demand. In principle, one could build enough housing to meet demand for any growing city (such as Shanghai or Bangalore), but as a physical, rather than a policy matter, this can be difficult. This implies that very successful cities will need subsidies in order to have the heterogeneous labor force necessary for an economy to thrive. The talk ended by discussing what those subsidies might look like.
Bio: Richard Green is the Director of the USC Lusk Center for Real Estate. He holds the Lusk Chair in Real Estate and is Professor in the USC Sol Price School of Public Policy and the Marshall School of Business. In 2015-16, he served as Senior Advisor for Housing Finance at the US Department of Housing and Urban Development. He has been Principal Economist and Director of Financial Strategy and Policy Analysis at Freddie Mac. He was recently President of the American Real Estate and Urban Economics Association.
Discussant: Sameer Sharma, DG & CEO, Indian Institute of Corporate Affairs (IICA). Previously he served as the Additional Secretary, Ministry of Housing and Urban Affairs, where spent 4 years on the Smart Cities Project.
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