Professional Documents
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HOusing Lecture
HOusing Lecture
Human needs
- Recurring need
- Hierarchical need
Housing need is based on numbers of people requiring housing, whereas, demand on the ability and
willingness to pay for it.
Scarcity-choice-opportunity cost
- Anything (natural or manmade) that can be used as an input in production of outputs such as
housing construction. E.g., Land, labor, capital, technology, entrepreneurship
- Resources often have alternative uses.
- Demand
- Utility
- Scarcity
- Transferability
Demand
- Is a willingness and ability of a consumer to purchase goods and services at a specific price
within a set of possible prices at a given period of time
- Law of demand: price of a commodity and its quantity demanded are inversely related, ceteris
paribus (price is not the only factor that affects supply of quantity demanded, however it is the
major factor)
Housing demand?
Housing supply
- Supply is the amount of goods and services that businesses are willing and able to produce at
different prices during a certain period of time.
- Law of supply: the quantity supplied of commodity varies directly with the price of the
commodity, ceteris paribus
Housing supply- the amount of housing units constructed in a given period of time in
a given area
Market equilibrium –
- Refers to a situation in which the price has reached the level where quantity supplied equals
quantity demanded
- Equilibrium price: the price that balances quantity supplied and quantity demanded.
- Equilibrium quantity: the quantity supplied and the quantity demanded at the equilibrium price.
- Durability (physical)
- Heterogeneity or non-homogeneity: dwellings differ in size, location, floor plan, interior
features, and utilities (physical)
- High transaction costs (economic)
- Liquidity (economic)
- Both an investment good and a consumption good
- Immobility: it is impractical to move dwellings from one location to another (physical)
- Relatively high resale costs. (economic)
The five key interdependent components that interact in any housing market are
- Strategies
- Policies
- Instruments
- Actions
Growth was not a passive, trickle-down strategy for helping the poor. It was an active, pull-up strategy
instead. It required a government that would energetically take steps to accelerate growth, through a
variety of policies