Why It Is So Hard to Make Sense out of Housing: One Reason

One of he reasons it is so hard to make sense out of the housing bubble: "housing," so-called, is so many different issues. Consider:

• The campaign, so popular with Democrats and Republicans alike, to extend home ownership to non-owners.

• Houses as piggy banks, or ATM machines--the second mortgage equity access program.

• The slow and painful--and sometimes rapid and painful--decline of once-great cities.

• The campaign of looting, undertaken by organized marauders who succeeded in transferring loan proceeds to themselves by systematic fraud.

• The clueless and luckless "investors" from Nowheresville who stumped up hard cash hoping to share in the transformation of a former alligator farm into the Next Great Sunbelt metropolis.

Behind all these, we have:

• The revolution in finance, including the creation of new devices to "rationalize" (he he) the mortgage market.

• The tsunami of new capital, seeking protection against the dismal returns and the seemingly astronomic risks of Asian investing.

• The grey monster, still porrly defined and worse understood, that we choose, for lack of a better name, to characterize as "the bubble."

Bullet points inspired (although not supplied) by the best thing I've read on housing policy in years. That would be Alyssa Katz' Our Lot. The subtitle is "How Real Estate Came to Own Us," but that's way too facile for a presentation fo subtle and nuanced. Katz covers a daunting range of material: the early community action groups in the 70s; the invention of mortgate securitization in the 80s; the full-court press for expanded ownership in the 90s, and that unspeakable phase when everything when kablooie in the naughts. And she brings off the trick almost unheard of in this kind of semi-journalism: she couples a gift for personalized narrative with a commendable skill at sketching the technical background.

There is nothing here by way of an agenda for reform. And she presents it all with an air of hip detachment which suggests that she knows that life is bound to be like this under capitalism, and we can't expect much to change until the revolution or the next ice age. Yet the details of her own message deny the larger aroma: she makes it clear that the story is far too rich and nuanced for for detachment of any sort, hip or otherwise.

One more substantial drawback: she ends with a chapter, overlong and not nearly so well organized, on New York City, specifically the New York of rent control and condo conversions. As a topic in an overview of this sort, New York is certainly fair game. But the trouble is that she's too close to it: she's been burned by rent control and burned by the market, and she still doesn't have a good fix on exactly what went wrong and how.

But that's not much of a problem. It's the end of the book; you can skip it if you like. For the rest, as a means to get your mind around real estate issues, I can't think of a better place to start.