Housing Shortage - Numbers of Middle Aged Lodgers Soaring

CLAPTON

HAMISH_MCTAVISH wrote: »

I rather suspect quality of life is more closely linked to economic issues than population density for most people.

I tend to agree with the evidence and data that suggests increasing population will improve the economic outlook for the overwhelmingly vast majority of people in the UK.

And I think that this will be more important in determining their quality of life than how much empty space they have in the nearby area.

You quite clearly agree with the less factual and more emotive arguments about 'overcrowding' instead.

We'll agree to disagree I think.....

there is little real data bout the effects of increasing the population because all of it is based on flawed GDP data.


whilst every single economist and very single economics book knows and discusses the failing of GDP to measure goods and service, nevertherless they always use the flawed data in their arguments.


so I doubt very much your 'factual ' and 'unemotional' data is quite what you think it is.


so your traffic jam that you think adds to GDP (more fuel used), I believe is a cost and decrease our overall 'real' GDP (which I call quality of life):
more wasted fuel is bad news; more time in traffic jams is a bad thing: higher fuel imports is bad news


but not of course to the economists.


so I agree more real facts and figure less rubbish facts and figure.

HAMISH_MCTAVISH

CLAPTON wrote: »

there is little real data bout the effects of increasing the population because all of it is based on flawed GDP data.

so I agree more real facts and figure less rubbish facts and figure.

In this case, "rubbish" data appears to be whatever data you don't agree with.

We get it, you don't want population growth. You'd prefer fewer people even if it costs us economic prosperity.

You are entitled to that view.

But I obviously don't agree with you.

Bantex_2

HAMISH_MCTAVISH wrote: »

I rather suspect quality of life is more closely linked to economic issues than population density for most people.

I tend to agree with the evidence and data that suggests increasing population will improve the economic outlook for the overwhelmingly vast majority of people in the UK.

And I think that this will be more important in determining their quality of life than how much empty space they have in the nearby area.

You quite clearly agree with the less factual and more emotive arguments about 'overcrowding' instead.

We'll agree to disagree I think.....

Is this always the casee though.
For example if my salary dropped by £100 per week but my housing costs dropped by £150 per week, I would be better off.

MARTYM8`

Surely the supply of money rather than house building is a factor.

Ireland didn't have fewer homes in 2009 than 2007 - it didn't stop prices falling 50% cos the banks stopped lending.

China has seen a crazy boom - but apparently there are 80 million empty homes there.

Its way too simple to say that its about the supply and demand of housing - its about the supply of money as the last two years has shown which also drives up prices. The government has chucked tens of billions at getting people to buy homes!

HAMISH_MCTAVISH

MARTYM8` wrote: »

Surely the supply of money rather than house building is a factor.

The ability to raise funding is a component of effective demand.

Ireland didn't have fewer homes in 2009 than 2007 - it didn't stop prices falling 50% cos the banks stopped lending.

The banks stopped lending here too, but prices fell far less.

Interest rates dropped in Ireland as well, yet it didn't stop their prices falling.

The big difference between the two markets is that Ireland had 17% of it's houses empty in 2007. The UK had 1.5% of it's houses empty in 2007, and most of those were in the wrong place for current demand.

We had a shortage of housing in 2007, whereas Ireland (and Spain, and the USA) had a whacking great surplus.

In all of those markets lending froze up, interest rates fell to near zero, banks were bailed out, and governments threw billions at trying to get lending moving again.

Yet in Spain, Ireland, the USA, prices kept falling anyway. Only in Britain did prices stop falling and rapidly rebound.

If you virtually stop almost all mortgage lending in a market, prices will fall, no matter if there is a shortage or a surplus.

But where the prices were initially caused by a shortage of housing, rather than a speculative bubble, then prices won't fall very far and will regain almost all the lost ground even at lower lending levels.

Which is exactly what has happened in the mainland UK.

Its way too simple to say that its about the supply and demand of housing - its about the supply of money as the last two years has shown which also drives up prices. The government has chucked tens of billions at getting people to buy homes!

The government has attempted to restore some functionality to lending markets still dysfunctional after the credit crunch.

In spite of this, mortgage lending in the UK remains heavily restricted, with approvals running at not much more than half the pre crisis levels.

And yet prices have now exceeded 2007 levels and reached a new all time peak, on average.

Which is no surprise, as you can't cure a housing shortage through restricting lending. All that happens is building falls to all time record lows, rents soar to record highs, and the shortage worsens.

So now prices have risen again despite mortgage rationing remaining endemic, and the next boom will be bigger than the last.

If you want lower house prices, sustainably and over the long term, build more houses.

There really is no other way.

HAMISH_MCTAVISH

Bantex wrote: »

if my salary dropped by £100 per week but my housing costs dropped by £150 per week, I would be better off.

Not if your taxes then rose by £200 a week to fund all the old people and national debt, as there were fewer working age people having to pay for it all.

Many hands make light work....

CLAPTON

HAMISH_MCTAVISH wrote: »

In this case, "rubbish" data appears to be whatever data you don't agree with.

We get it, you don't want population growth. You'd prefer fewer people even if it costs us economic prosperity.

You are entitled to that view.

But I obviously don't agree with you.

Every single economist is the world agrees with me.

Every single first year uni textbook agrees with (the more advanced don't actually repeat the issue as they assume it's a given.)


you don't agree : so be it.

SkyeKnight

danothy wrote: »

No, it's not. In a population of 5 you will have four workers and one retired. As they all age the retiree will eventually die, and the oldest worker will take their place. During that time one of the workers will also have sprouted a kid, who grows up to effectively be the youngest worker. This is a self sustaining population with a 4:1 ratio and a stable life expectancy.

Should life expectancy increase and the first retiree not die so soon, the population may find themselves with two retirees and four workers. Assuming the life expectancy increase has stabilised there is now a 2:1 ratio of workers to retirees, double the work load in terms of provision for others. Lacking other options, the population increases by immigration from some arbitrary place. There's now 8 workers and 2 retirees. Ratio restored. This isn't a problem, as in the long run the two retirees will die at some offset from each other, the two oldest workers will retire, and two of the working age population will have kids. Thus stable.

This scales. It is mathematically convergent so long as there is more working life than retirement. Thus, there is no pyramid unless there is increasing life expectancy. Life expectancy cannot increase indefinitely. Thus there is no pyramid.

No. Wrong.

OK, so you start off with 4 workers and 1 pensioner which is stable. By definition, this means that people must be working for 4 times as long as they are retired (and the birth rate equalling the death rate).

You then increase life expectancy, thus people are working less than 4 times as long as they are retired, and find yourself with 2 pensioners to 4 workers. Just importing 4 more people will not fix this except temporarily, because you still have people working LESS than 4 times as long as they are retired. Very soon you will have 3 pensioners and 8 workers and need to import another 4. This is NOT STABLE, even with a fixed life expectancy.

You also need to increase retirement age to maintain the ratio of 4 workers to one pensioner. But then you may as well have done that when you had a population of 5! For some reason you seem to think a larger population can support a greater ratio of pensioners which is not true. Ratio is independent of size.

danothy

SkyeKnight wrote: »

No. Wrong.

OK, so you start off with 4 workers and 1 pensioner which is stable. By definition, this means that people must be working for 4 times as long as they are retired (and the birth rate equalling the death rate).

You then increase life expectancy, thus people are working less than 4 times as long as they are retired, and find yourself with 2 pensioners to 4 workers. Just importing 4 more people will not fix this except temporarily, because you still have people working LESS than 4 times as long as they are retired. Very soon you will have 3 pensioners and 8 workers and need to import another 4. This is NOT STABLE, even with a fixed life expectancy.

You also need to increase retirement age to maintain the ratio of 4 workers to one pensioner. But then you may as well have done that when you had a population of 5! For some reason you seem to think a larger population can support a greater ratio of pensioners which is not true. Ratio is independent of size.

You misunderstand what I "seem to think". I understand the mathematics of it. I understand that you can increase the population to engineer a particular ratio, and that you can do that because the drop off in population with age means that there are less person years being lived in retirement than worked for any population size so long as the population is working a reasonable proportion of its life expectancy. Thus, you can engineer the ratio between them by a change in population size.

What you state above isn't the case because life expectancy is not a cliff face. If it was, and we all died at the same age you would be correct. An increase in population would have the same proportional impact on both sections of that population. In that scenario, if you have four times the workers to retired and increase the population uniformly (or wait for equilibrium) then you will have added four times as many workers as retired and the ratio would remain the same. Counter productive if your aim is to alter the ratio.

This is not how it works though. Because people die over a range of years with some average life expectancy. The death rate (when considering a static life expectancy) is fixed, and hence the number of deaths is a function of the population size. The "extra" population in retirement will be subject to the same death rate as the existing retired population, and so it's impact will not be uniform across the retired population, as they are the ones who are dying. Deterministically, this means that the impact for each worker (who makes it to retirement) will have been 1+ for the work but <1+ for retirement. Increasing population therefore can maintain the ratio.

I don't know how many different ways I can frame it, but you need to get the idea that if you increase the population size the retired population will increase commensurately. It won't. It will increase to a lesser extent than the working population, thus we can converge on a particular ratio of workers to dependants by increasing population size in a finite, convergent manner. The main reason the retired population is increasing at the moment is because life expectancy is increasing. Working longer is an option too, but increased life expectancy doesn't necessitate ability to work longer, so it's not necessarily a viable option.

SkyeKnight

danothy wrote: »

I don't know how many different ways I can frame it, but you need to get the idea that if you increase the population size the retired population will increase commensurately. It won't. It will increase to a lesser extent than the working population, thus we can converge on a particular ratio of workers to dependants by increasing population size in a finite, convergent manner.

Any sized population, large or small, with a fixed average life expectancy will not converge on a ratio of workers to dependants that is necessarily desirable. Once workers have stopped being imported it will (over the long term) converge to the ratio of average years worked to years in retirement.

The only way to keep the desired ratio if it is larger than this, is to (1) continue to import workers (2) increase retirement age.

I think the error is coming because you think that just adding less pensioners than workers to the system will lower the ratio of pensioners to workers?