Housing as a Vessel for Knowledge Wealth

More than anything, traditional housing stock is intended as a holding pattern for reliable income, and income potential. Much of present day housing particularly reflects knowledge use which is well compensated, in asymmetric terms. Even though human capital is represented - however - only certain aspects of human capital are considered economically viable, for today's default rigid investment settings for housing stock.

Perhaps this conceptualization could help, given frustrations over what have become widespread housing constraints. To some degree, attempts to "get at" housing constraints through redistribution for better economic access, miss the point. One may imagine more taxation on land, for instance. Or argue for the inclusion of more population in (already existing) vital cities, so as to be at the heart of economic action.

But it's not quite that simple. Growth is needed on terms which can expand equilibrium, instead of attempts to push redistribution through an already defined, relatively stable equilibrium. When housing values reflect wealth holdings which replicate existing knowledge use patterns, how does one know that greater population density could - or should - change this dynamic at the heart of equilibrium? Much of this form of knowledge wealth, has been generated through product replication on terms which don't necessarily utilize broad time aggregates. In other words, given employment densities have bearing on the ways that city based equilibrium patterns are established.

Housing holds a passive role, as an "after the fact" reality given the economic activity which precedes it. As such, housing has become a primary stabilizer in today's general equilibrium, particularly as expressed in today's prosperous cities.

Consider the calls for change, in this context. In a recent post, Steve Randy Waldman explains how economic conditions rely on already existing constants, in terms of long term wealth formation and environmental structure. One of the interesting things about his perspective, is the fact I have been as stirred by market urbanist arguments as anyone in recent years, in spite of their impracticality. Here's Waldman:

My view is that the "market urbanist" diagnosis of the problem is more persuasive than its prescription for addressing it. On normative terms, I'm not sure that they should. The market urbanists present themselves as capitalist deregulators but I also think they can be described with equal accuracy as radical redistributionists...Economists describe houses as a form of capital that provides a stream of services, rather than a cash flow, to owner-occupants. We should also describe the arrangement of neighborhoods as a form of capital that provides services people value.

As to the last two sentences, his sentiments would hold equally true for local corporations and knowledge use systems, which would contribute far more environment and lifestyle consumption (infrastructure) choices than presently exist.

Housing as a vessel for the action and definition of knowledge wealth, is better news than may appear at first glance. Freer use of knowledge in the marketplace, would simultaneously create freer application of housing options. While some might describe me as a radical redistributionist for knowledge use (as opposed to housing), I don't propose to generate symmetric knowledge use where it already holds specific asymmetric value, in relation to general equilibrium.

Rather, I would like to see knowledge diffusion which builds overall wealth potential on alternative equlibrium terms. Fortunately, what matters most in all this is that economic activity prior to housing formation, is what needs to be loosed in the marketplace. By front loading the process with new knowledge wealth, there would no longer be a zero sum struggle, for the prosperous regions of the world. Through expansion of knowledge use to areas where it need not distort existing patterns, new knowledge wealth would mean room for new housing wealth, as well.

To all of my readers, a Merry Christmas!