Lead Story… 2015 might very well go down as the year that income inequality became as much an economic growth issue as a social issue. The well-worn argument goes something like this: income goes increasingly to the top 1% of the population because capital is going up in value while labor is going down in value. It turns out that the above rationale begins to fall apart when you isolate one variable: housing (h/t Michael Rolfes). A MIT grad student named Matthew Rognlie has been making waves in economic circles with the theory that inequality is actually a result of ultra-restricted zoning in closed access cities that prevent new housing and make barriers to entry in strong employment areas extremely high. San Francisco (and the Bay Area in general) is the classic example of the worst-case version of this scenario. Rognlie’s prescription for dealing with inequality is far different from the usual soak-the-rich political talking points that rear their head at certain points in the election cycle: “Rather than taxing businesses and wealthy investors, policy-makers should deal with the planning regulations and NIMBYism that inhibit house building and which allow homeowners to capture super-normal returns on their investments.” White House economists are now taking note so there is a good chance that the NIMBY crowd is going to come under far more scrutiny in the coming months.
Changing of the Guard: The bull market that began in 2009 might not be over but key drivers of the economy during that time (fixed investment in commodities/energy, auto sales, multi-family residential construction, tech job growth, and corporate borrowing) are unlikely to lead us from here.
Snails Pace: New businesses are much slower to hire than they were a decade ago. Here is why that is a really big deal.
Long Memory: Like it or not, the impact of the Great Recession is still lingering.
Study Up: Student housing is still booming as an investment class.
The Roots of Gentrification: A new study proposes an intriguing explanation for increasing gentrification in city cores: an increasing aversion to commuting. It’s been well documented that American workers have less free time than ever. As such, they are increasingly likely to value a reduced commute more than a large house/yard in the suburbs.
Missing Appraisers: The number of real estate appraisers is falling. Here’s why (hint: it starts with an R and rhymes with eggulation).
Mouse House: You can now rent a 360sf “micro-apartment” in Brooklyn for $2,750.
Under-supplied: Sales of existing homes fell in November as realtors figured out that it’s difficult to achieve volume when there aren’t very many homes for sale. See Also: China has exactly the opposite problem as the US – a housing glut.
Spanish for The Nino: The predicted Godzilla El Nino this winter probably won’t end California’s 4-year long drought but it certainly won’t hurt.
The Samoan Pipeline: Ever wonder why so many top football players come from small island in the middle of the pacific?
FAIL: Day trade stocks if you must but don’t be this guy.
Oblivious: Somehow Citi managed to miss a massive money laundering operation going on right under its nose in Mexico.
Chart of the Day – NIMBYs take note
Meme of the Day: If you spend any significant amount of time online you’ve probably noticed that the Internet has recently been overrun by videos of cats losing their shit when they see cucumbers. So just why are cats scared to death of cucumbers?
Today’s Sign Of the Apocalypse: the Oxford Dictionary word of the year for 2015 is an emoji.
Okay Then: Meet the man who invented “selfie arms” because apparently selfie sticks aren’t awful enough.
Don’t Flush: A pilot program in Vermont (of course) has people recycling their pee to harvest phosphorus and nitrogen for use in fertilizer.
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