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Federal Reserve Wrong

Ron Feldman and Mark Wright from the Federal Reserve wrote a piece for the StarTribune called “Private market must be a central part of affordable-housing solution.” In this piece, they argue that the private marketplace will provide affordable housing by simply building more housing.  They also argue that existing housing values will decline in value over time and make more affordable housing in the future. You can read the piece here:

http://www.startribune.com/private-market-must-be-a-central-part-of-affordable-housing-solution/497866751/

The problem is that they are wrong. The economist Dennis Paulaha wrote a counterpoint explaining that simply building more expensive housing will not magically create more affordable housing.  Also, the price of housing does not go down over time either, as anyone who owns a home knows.  The link to his commentary is here:

http://m.startribune.com/minneapolis-2040-plan-standpoint-an-economic-principle-is-being-misused/488938921/

 

 

 

 

 

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