All the business types are completely gaga over the housing start numbers coming out of the Census bureau and HUD; they show new single family housing units up 11% over August, with 603,000 houses under construction. A rule of thumb is that each house built means three new jobs in construction, and then there are the jobs in the big box stores selling the furniture and electronics to fill the houses and the cars to park in the driveways. Fortune Magazine predicts a continuing boom:
The big question is whether Americans renew their love affair with home ownership only gradually or with a burst of enthusiasm. Here's a new prediction: The latter is a lot more likely than the experts are now saying. The housing comeback continues.
At the Atlantic, they are positively bubbly.
Employment will improve next year because more of these folks [builders]-- and more real estate agents, lenders, inspectors and appraisers too -- will have jobs. This doesn't mean real estate will grow to the proportions it had at the height of the Bush-era bubble, when it was two and a half times larger than it is today. But it does mean that things will get much better. In fact, it's why they already have.
Of course the timing couldn't be better for Obama supporters since so much of this election is about the economy and the construction industry creates so many blue-collar jobs; I am waiting for Jack Welch to complain that the Chicago guys cooked the numbers. Everyone is so excited that nobody is even questioning whether this is a good thing.
Perhaps Jim Kunstler is overstating the case when he calls suburban development "the greatest misallocation of resources in the history of the world." But how many of those 603,000 houses are being built in walkable neighbourhoods, to any kind of standard of construction that exceeds the building code minimum. How many of them are being built out of anything but formaldehyde and vinyl. Almost none, but we are all so desperate to get people nailgunning 2x4s that nobody is even asking the questions. Once again it is just the way it is done in America; as Kunstler said earlier this year:
One of the unfortunate repercussions of building suburbia is: now that we've built it, it provides a very powerful psychology of previous investment. Which means that you put so much of your wealth into this system already -- into this structure for daily life with no future -- and you've invested so much of your national identity in it, that you can't even imagine letting go of it or substantially changing it or reforming it. And that, I believe, is what's behind our inability to have a coherent discussion about what we're going to do about our problems in America. Because the psychology of previous investment has got us trapped in a box -- we will not allow ourselves to think about how we're going to do without this crap.
Seriously, lets do it right this time.