Legal, Economic and Strategy Issues in Housing in the New Economy

Abstract

Housing accounts for more than 80% of the built environment in most countries, and affects almost every facet of family life, human development and crime rate. The advent of the Internet and Telecommuting will continue to change housing needs and development patterns. The debate about affordable housing in the US has recently taken on more relevance due to rapidly rising rents, housing shortages, changes in demographics and inadequate financing. This article analyzes the housing market in the NY Metro Area, to illustrate the legal, economic, policy/political and strategy dimensions of the housing problem. The New York Metropolitan Area housing market has evolved into a mini-industry due to very rare and unique circumstances. The federal government, state governments, local governments, and private companies have reacted very differently to changes in this failed mini-industry, and this has yielded rather unfortunate results - inadequate housing, over-crowding, inflated rents and property prices, government payments for emergency housing and general uncertainty. This mini-industry needs to be restructured. This paper analyses economic, legal and public policy issues in this mini-industry. The article then explains various possible remedies to the affordable housing problem, and new model of competition and industrial structure and new theories of industrial change.