Economics: Why A Shrinking Housing Sector Is Good News

 (Drivebycuriosity) - There is a lot lamentation about the shrinking housing sector. Reuters reports "U.S. homebuilding dropped to a near two-year low in March, pulled down by persistent weakness in the single-family unit segment, suggesting the housing market continued to struggle" (reuters). They added: "Single-family homebuilding, which accounts for the largest share of the housing market, dropped 0.4 percent to a rate of 785,000 units in March, the lowest level since September 2016".

I think this is good news. The fewer houses are build, the better for climate, economy & society. There are already way to many single-family buildings in the US. When I travel I often drive through a vast urban sprawl, a sheer endless row of houses & mall which covers large areas. Building more houses expands the sprawl and destroys more forests, bush- and grassland and amplifies the greenhouse effect. If people instead chose to live in multi storey buildings in big & dense cities like New York they would leave more room for green nature and so curb global warming - at least a bit. 

People who live in the sprawl also need to drive a lot for jobs, labor & leisure. Unfortunately the exhausts of their car - and the trucks which cater these areas - are a part of the greenhouse gases which create global warming. The more houses are build in the sprawl the larger is the emission of greenhouses gases. If people would decide to live in the big dense cities they would need to drive less & shorter distances. I live in New York City and I don´t need a car (and I don`t have one) because the distances are short. Most things can be done by walking or using subways & buses.

Americans who live in the sprawl also depend on gasoline. As a result the US economy is addicted to gasoline and gets hurt when gas prices spike. Nine out of ten of the U.S. recessions since World War II were preceded by a spike up in oil prices, writes Prof. James D. Hamilton, University of California, San Diego (econbrowser  ). In 2008 rising household energy prices constrained household budgets and increased mortgage delinquency rates" (oilprice). Low income suburban homeowners suffered most from the rising gas prices.  Poor homeowners are called "subprime" and their delinquencies are known as "subprime crisis."

I am aware that everybody has the right to live in the sprawl and to continue to drive a lot. You may do so, but please, stop whining about climate change, oil prices, loss of green nature & recessions.