1、13thAnnual Demographia InternationalDemographia International Housing Affordability Survey: 2017 Rating Middle-Income Housing Affordability Australia Canada China (Hong Kong)Ireland Japan New Zealand Singapore U i d KidU i d SUnited Kingdom United States With comparisons to External Indexes for Chin

2、a and Malaysia Introduction by Oliver Hartwich The New Zealand InitiativeThe New Zealand Initiative Data for 3rdQuarter 2016 13th Annual Demographia International Housing Affordability Survey INTRODUCTION Housing Affordability: A Social Imperative Oliver Hartwich Executive Director, The New Zealand

3、Initiative It is a great honour to provide the foreword to this years Demographia International Housing Affordability Survey. Not just because I am humbly following in the footsteps of previous contributors to the series, many of whom I know personally and admire deeply. But mainly because I have be

4、en a fan of Demographias indices since they started in 2005. I first became involved in housing debates in that year when I was a researcher at London think tank Policy Exchange. I remember very well how difficult it was to put a figure to housing affordability which is also internationally comparab

5、le. Demographias median multiple approach closed this gap. It firmly established a benchmark for housing affordability by linking median house prices to median household incomes. It is as simple as it is ingenious. And it is probably the index I have cited most often in my career. The median multipl

6、e is not a perfect measure because it does not account for house sizes or build quality. But it is the only index that allows a quick comparison of different housing markets, and it is the best approximation of housing affordability measures we have to date. So first of all, my congratulations and t

7、hanks to Wendell Cox and Hugh Pavletich: You have done the world a great service with your annual surveys and with your advocacy for housing affordability. When John Lennon met Elvis for the first time he said, “Before you there was nothing.” I feel the same way about your housing affordability inde

8、x. Thank you. Demographias reports and countless other surveys and studies do not leave the slightest doubt that unaffordable housing is almost everywhere and every time caused by the same factor: housing supply restrictions. The more restrictive the market, the more prices will increase over time.

9、To any undergraduate student of economics, this will not come as a surprise. But it is still a relatively novel discovery for many planners and politicians. 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) Fortunately, the media are waking up to the realisation

10、that housing and land supply matters. The most powerful infographic of 2016 was produced by The Wall Street Journal. It showed what happened to house prices in US cities that had expanded their residential areas between 1980 and 2010 and those that had not.1 As was to be expected, greater land suppl

11、y went hand in hand with lower price increases. The same link can be seen internationally. On its website, The Economist allows readers to compare house price developments across a range of developed economies.2 The linked figure contrasts the United Kingdom, Australia, the United States and Germany

12、 and other countries over the past 40 years. What stands out about The Economists graph is the stark contrast between Germany on the one hand and the English-speaking world on the other. It was this contrast which initially drew me into the housing debate. Germany is probably the country with the mo

13、st boring housing market in the world. It is a place where nothing ever happens (at least as far as housing is concerned). German house prices remain stable, and if it had not been for the euro crisis and negative interest rates, the Germans would probably still be able to buy houses for the same pr

14、ices in real terms that they paid twenty or thirty years ago. The story for other countries like Australia, New Zealand, the United Kingdom and large parts of the United States is a different one. There, house prices have gone through the (now unaffordable) roof. My own housing research focused on t

15、his difference: Why did Germany (and similarly Switzerland) provide housing stability where much of the Anglosphere did not?3 In a nutshell, the answer to this question has a lot to do with the way councils are funded. In jurisdictions where local decision-makers stand to gain from new development,

16、they will be much more eager to make it happen. In Germany and Switzerland, council budgets largely depend on their ability to attract new residents and taxpayers. This is why both countries are have traditionally had a more responsive and flexible housing supply side. The available financial incent

17、ives to planners and councillors made all the difference to house prices in the long run. In our work at The New Zealand Initiative, we have developed this incentives approach further. We have argued that it could be the key to solving housing affordability in New Zealand4, and we have applied this

18、thinking to other aspects of local government and resource management as well.5 Of course, planning reform and liberalisation remain both important and desirable. But without a financial framework that encourages and incentivises development, we will always struggle to deliver the houses we need. We

19、 need to tackle housing affordability urgently because the effects of unaffordable housing on society are becoming more visible by the day. Policies that raise housing costs are always likely to hit those on low incomes the hardest. Thus in our work on different measures of poverty and inequality, w

20、e have argued that the best way to tackle both issues would be to make housing more affordable.6 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) Especially at a time when there is a growing threat of populism to Western democracies, there is a social imperative

21、 for making housing more affordable. We should not accept extreme price levels in our housing markets. High house prices are not a sign of citys success but a sign of failure to deliver the housing that its citizens need. Of course, if you are an investment banker, a media personality or a sports st

22、ar, you will always be able to live a decent life, no matter how expensive your city is. And if you are within this group, you will also benefit most from the amenities that global cities provide. If, however, you are teacher, a nurse, or shop assistant your experience of city life would be very dif

23、ferent. You would then have to put up with all the downsides of extreme price levels without being able to participate in metropolitan life. But is this the kind of society we want to live in? And isnt this kind of social polarisation exactly the breeding ground for populism and resentment we are wi

24、tnessing? For these reasons, I believe that making housing affordable for all citizens is more important today than it has ever been. I applaud Demographias continued advocacy in this area and welcome this latest edition of the Demographia International Housing Affordability Survey Wellington, Decem

25、ber 2016 Dr Oliver Hartwich Executive Director The New Zealand Initiative www.nzinitiative.org.nz 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) 1 Laura Kusisto (April 18, 2016), Why the Great Divide is Growing Between Affordable and Unaffordable U.S. Cities,

26、The Wall Street Journal expensive-u-s-cities/. Based on research by University of California and B economist Issi Romem. 2 The Data Team (March 31, 2016), “Global House Prices,” The Economist, 3 Alan Evans and Oliver Hartwich, Unaffordable Housing: Fables and Myths, London: Policy Exchange, 2005; Al

27、an Evans and Oliver Hartwich, Bigger Better Faster More: Why some countries plan better than others, London: Policy Exchange, 2005; Alan Evans and Oliver Hartwich, Better Homes, Greener Cities, London: Policy Exchange, 2006. 4 Michael Bassett and Luke Malpass, Priced Out: How New Zealand lost its ho

28、using affordability, Wellington: The New Zealand Initiative, 2013; Michael Bassett and Luke Malpass, Different Places, Different Means: Why some countries build more than others, Wellington: The New Zealand Initiative, 2013; Michael Bassett, Luke Malpass and Jason Krupp, Free to Build: Restoring New

29、 Zealands Housing Affordability, Wellington: The New Zealand Initiative, 2013. 5 Jason Krupp, Poverty of Wealth: Why minerals need to be part of the rural economy, Wellington: The New Zealand Initiative, 2014; Jason Krupp, From Red Tape to Green Gold, Wellington: The New Zealand Initiative, 2015; Ja

30、son Krupp and Bryce Wilkinson, The Local Formula: Myths, Facts Eric Crampton and Khyaati Acharya, In the Zone: Creating a Toolbox for Regional Prosperity, Wellington: The New Zealand Initiative, 2015; Jason Krupp, The Local Benchmark: When smaller is better, Wellington: The New Zealand Initiative, 2

31、016; Jason Krupp, The Local Manifesto: Restoring local government accountability, Wellington: The New Zealand Initiative, 2016. 6 Bryce Wilkinson and Jenesa Jeram, Poorly Understood: The State of Poverty in New Zealand, Wellington: The New Zealand Initiative, 2016; Bryce Wilkinson and Jenesa Jeram,

32、The Inequality Paradox: Why inequality Matters Even Though it has Barely Changed, Wellington: The New Zealand Initiative, 2016. 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) Highlights from Previous Introductions to the Demographia International Housing Affor

33、dability Survey Senator Bob Day, AO, Senate of Australia (#12: 2016) The distortion in the housing market resulting from the supply-demand imbalance is enormous and affects every other area of a countrys economy. New home owners pay a much higher percentage of their income on house payments than the

34、y should. However, the real culprit was the refusal of governments to provide an adequate and affordable supply of land for new housing stock to meet demand. the scarcity that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of

35、restrictions imposed through planning regulation and zoning. Dr. Shlomo Angel, New York University (#11: 2015) We all understand what it means to prepare adequate lands for urban expansion, enough land to accommodate both residences and workplaces, so as to ensure that landand particularly residenti

36、al landremains affordable for all. Unfortunately, municipalities of many rapidly growing cities often underestimate the amount of land needed to accommodate urban expansion. In the minority of cases where expansion is effectively contained by draconian laws, it typically results in land supply bottl

37、enecks that render housing unaffordable to the great majority of residents. Alain Bertaud, New York University (#10: 2014) It is time for planners to abandon abstract objectives and to focus their efforts on two measurable outcomes that have always mattered since the growth of large cities during th

38、e 19th centurys industrial revolution: workers spatial mobility and housing affordability. As a city develops, nothing is more important than maintaining mobility and housing affordability. Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another

39、; and second, the ability to trade dwellings easily with low transactions costs. Hon. Bill English, Deputy Prime Minister, New Zealand (Now Prime Minister) (#9: 2013) Housing affordability is complex in the detail governments intervene in many ways but is conceptually simple. It costs too much and t

40、akes too long to build a house in New Zealand. Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand. 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) Robert Bruegmann

41、, PhD, University of Illinois, Chicago (#8: 2012) I think it is fair to say that a growing number of people who have looked at the figures have tended to agree that a good many well-meaning policies involving housing may be pushing up prices to such an extent that the negative side-effects are more

42、harmful than the problems the policies were intended to correct. Joel Kotkin, Chapman University (#7: 2011) Although usually thought of as “progressive” in the English speaking world, the addiction to “smart growth” can more readily be seen as socially “regressive”. In contrast to the traditional po

43、licies of left of center governments that promoted the expansion of ownership and access to the suburban “dream” for the middle class, today regressive “progressives” actually advocate the closing off of such options for potential homeowners. Dr. Tony Recsei, Save Our Suburbs, Sydney (#6: 2010) Duri

44、ng the 18th century, especially after the industrial revolution, rural dwellers desperate to make a living streamed into the cities, converting many areas into overcrowded slums. However, as the new economic order began to generate wealth, standards of living improved, allowing an increase in person

45、al living space. Unless we are vigilant, high-density zealots will do their best to reverse centuries of gains and drive us back towards a Dickensian gloom. Dr. Shlomo Angel, New York University (#5: 2009) For cities to expand outward at their current pace to accommodate their growing populations or

46、 the increased demand for space resulting from higher incomes the supply of land must not be artificially constrained. The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land

47、is very difficult to come by, housing becomes unaffordable. Dr. Donald Brash, Fomer Governor, Reserve Bank of New Zealand (#4: 2008) .the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residentia

48、l land. Australia is perhaps the least densely populated major country in the world, but state governments there have contrived to drive land prices in major urban areas to very high levels, with the result that in that country housing in major state capitals has become severely unaffordable. 2007: 3rd Edition 2006: 2nd Edition 2005: 1st Edition 13th Annual Demographia International Housing Affordability Survey (2016: 3rd Quarter) TABLE OF CONTENTS Introduction: Housing Affordability: A Soc