IE 11 is not supported. For an optimal experience visit our site on another browser.

Unlocking the housing market with Justin Fox: podcast and transcript

Chris Hayes speaks with Bloomberg Opinion columnist Justin Fox about how the pandemic economy has changed the housing market – and whether it will last.

Why is the housing market so hot right now? From the pandemic-induced influx of people working remotely to our collective obsession with cruising Zillow (it’s not just us, right?), Bloomberg Opinion columnist Justin Fox discusses why some parts of the country are seeing housing prices sky rocket.

Note: This is a rough transcript — please excuse any typos.

JUSTIN FOX: The whole remote work thing is something that, for people with white-collar jobs and college educations. There aren't many opportunities for everybody else. And when you look at what's been going on with real estate markets is you have all these people who probably felt pretty poor in Silicon Valley or New York, but are now among the richer people out in some distant suburb or smaller city where they've moved and their buying in is making it harder for people in those places who are just making local incomes and can't work remotely to afford housing.

CHRIS HAYES: Hello and welcome to "Why is this Happening?" With me, your host, Chris Hayes. The housing market’s been pretty nuts recently. It was definitely very nuts during COVID, where you had this situation in which lots of people all of a sudden were working from home and looking for more space. Now I should be clear when I’m talking about the class profile of those people. These are people with relatively affluent means of disposable income, these were people that often had white collar jobs, jobs in things like advertising, vacations or office jobs, where they were able to remote work, lawyers, etc. That is a relatively small slice of American households, just to keep all of this in perspective. But This huge crunch for space sent housing markets in a lot of places that were rural or suburban into complete, totally haywire. And that happened right around the lockdown, then the housing market kind of got frozen in place and cooled. And as people came out of lockdown, we’ve seen housing prices going bonkers all over the country as we have all of this kind of pent up demand. And of course, it’s always hard to know what to make of that. I mean at one level, it’s very complex, the housing market. It’s incredibly as we’ve learned from the 2007-2008 - it’s very bound up with government policy, with interest rate environment. It’s also hugely important to the lived experience of American citizenry, integration, climate change, and yet it often gets covered sort of only on the business pages. And I thought it was a really good moment to think and talk about housing after COVID because we’re in a new moment right now. We just had this incredibly disruptive experience that changed people’s daily work habits and patterns, some of that I think is gonna stick around, some of it will probably have enduring effects on the housing market and housing planning, urban planning, housing development going forward. Someone I’ve been reading forever is Justin Fox, a columnist at Bloomberg opinion. He’s the author of a great book that I really recommend from years ago called The Myth of the Rational Market. He’s been writing about COVID and housing. In a few different articles, he’s written about Orlando becoming less affordable than San Francisco which is a surprising result I think for a lot of folks, writing about millennials and their housing purchases. So Justin Fox, great to have you on Why Is this Happening.

JUSTIN FOX: Great to be here.

CHRIS HAYES: Let's start off this way, where was the housing market, we had obviously the huge notorious bubble and boom of '04 through '07. We had the unbelievable crash. It took a very long time. I know someone who, for instance, was telling me about a condo he bought for $135,000 at the peak at 2006 and it went down to 39,000 at the trough. And now it was back to 95,000, just as one piece of property and a sense of that, but where was the housing market before we hit COVID?

JUSTIN FOX: I mean, I think in places, especially the Bay Area, but also New York, other coastal metros, it was very strong. And it had never collapsed quite the way it had in Arizona or Las Vegas or the rust belt. But overall the US housing market was in a pretty good place. The home ownership rate was rising steadily, prices were going up, but so were incomes in most places. Again, in the Bay Area the prices seem to be going off in some crazy place, although incomes are really high there too. So I think in most ways it was a healthy housing market, except that, I mean, the thing that people use to define it as healthy was basically that there weren't any dodgy loans going on meant that most people had to have pretty big down payments. So it was pretty affluent people who were the only ones able to buy housing, except in really cheap places.

CHRIS HAYES: We also had this perennial situation which we'll get to sort of afterwards, but just to set the context for before COVID is that, it's been a real failure of a lot of Liberal Democratic Party controlled cities. San Francisco is the most obvious. There's been a lot in creating affordable housing, and particularly in having housing supply meet demand to keep prices fairly stable. That has been a perennial challenge in those places. And we've seen really high housing prices, right?

JUSTIN FOX: Yeah. And I mean, I will say, San Francisco proper, the city did better than a lot of places, but most of the suburbs around it did a terrible job. And in the end, supply and demand, doesn't explain everything in the world, but it's pretty clear that the reason why housing prices didn't go up as much in say Texas as they did in California, is that they kept building lots more housing in Texas. And part of that is just pure geography. I mean, a lot of these places that haven't built enough housing have a bunch of constraints that make it hard for them to do it.

But yeah, I mean, there was this thing going on in the US, and really around the world for the past 30, 40 years where the economic effects benefits to a glomeration, especially for what they call knowledge workers were getting higher and higher, having lots and lots of people with these skills in technology, in media, in other things in one place seemed to pay off in a big way. And so there were more and better jobs in those places that concentrated lots of people like that. Like, again, Seattle area, the Bay Area, New York and Austin, Texas, Raleigh, Durham. But in most of those places there was not nearly enough new housing going up. And in many cases, not the appropriate kinds of housing. I think we've been better over the past decade at building one bedroom apartments and big, four bedroom houses and not a whole lot in between.

CHRIS HAYES: One of the things that we see happen, there's this kind of YIMBY movement, yes, in my backyard, that's pushing for a few things. One is zoning reform to get rid of really strict zoning that for instance doesn't allow two or three unit houses. And we're not talking 60-story office towers, we're talking about, can you build a house in Charlottesville, Virginia that has two stories, sort of one condo kind of thing or one rental unit on each one. And in a lot of places it's just illegal to build that. It's very hard to build that kind of housing. And one of the things I keep coming back to on this supply constraint is that the fundamental thing to understand about housing and politics, particularly in urban environments specifically, but even, Charlottesville is not super urban, densely urban, is that the material interest of the current homeowner is just different than the people that don't own homes.


CHRIS HAYES: If you own a home, you want prices to go up and you don't want lots of new, big housing built around you. And if you don't own a home, you want prices to go down so you can afford to live somewhere. And in some ways those two material interests drive a lot of policy and are kind of incommensurable.

JUSTIN FOX: Yeah. And in most places, it's the homeowners who have the political power because they're more likely to vote. And just in most places they're in the majority. And it's always interesting when in a place like New York City where they're not, when the renters get riled up thing, big things can happen.

CHRIS HAYES: Right. But there also home, we have studies of this, they're also less transient. I mean, there's a shorter life cycle for how long people are around. They tend to get more involved in politics. And again, they have this material stake. I mean, I'm a homeowner now and it's weird because I always think, I don't think of my home as an investment chiefly, I think of it just as the place we live and it's a place that we can afford to live, but when housing crisis go up or down I'm like, "Oh, right, I wonder what that does to the house?"

CHRIS HAYES: This thing that I think of in political terms, which is, can people afford to live in New York City also means something specifically to me and my balance sheet. If you're a homeowner, I'm like, "You kind of get the wrong rooting interest, I guess is what I'm saying." If you tell me, "Well, housing prices went up 15% year-over-year." It's a windfall for people that are owning stuff, but it's just brutal for anyone else.

JUSTIN FOX: And I mean, one little side thing that's just sort of unique to the US, and there are lot of other countries with high home ownership rates. What's unique to the US is this obsession with detached single family homes and this belief that having them near any other kind of housing will reduce the value. There are really nice neighborhoods all over Europe where you've got fancy mansions next to little apartment buildings, and it doesn't seem to hurt the value, but that's another unique US thing that makes it even harder to do this sort of middle housing, the smaller, the two or three unit places you're talking about. And that just hasn't been built at all in the US in a couple of decades. There was a big apartment building boom over the past seven or eight years, but again, it was mostly in larger buildings and it was mostly one bedroom apartments.

CHRIS HAYES: So that's the kind of conscious. You have this sort of lack of this kind of middle housing. You've got some supply constraints that you're hitting up against in a lot of metro areas that have been growing through this agglomeration of college educated, white-collar workers that are driving, that have very high income places. Like Seattle, we talked to Alec MacGillis about his Amazon book, which talks about this and the effect that that's had on the City of Seattle. And then COVID hits. What does COVID do to the housing market?

JUSTIN FOX: I mean, the initial thing was it sent a bunch of people who were on the edge about living in the city, in many cases, like young parents with their small kids at home who would probably would have been looking at a place in the suburbs in the next five years, it sent them looking very quickly. That was, I think, the first really big thing. And then as time went on, there was also this realization that remote work was practical for more people than had been thought before. And that led to these booms in places even farther from big cities. And the thing in all of these, both suburbs, but especially these little markets like Bozeman, Montana, I mean, even Boise, to some extent, it's pretty big, but it's still not big like the places that people are coming to it from. You have this, it's just too many people at once. And so you have the bidding wars and everything else.

I mean, another funny factor that Issi Romem great housing economist wrote about a few months ago is that, to some extent, this whole, the rise of Zillow and other home search technology also just, it's now conceivable for somebody to sit at their computer for a couple hours and pick out a house 1,000 miles away and buy it.

CHRIS HAYES: I have no idea what you're... I have never done that. I don't know why you're accusing me of sitting on Zillow.

JUSTIN FOX: Yeah, but people did.

CHRIS HAYES: I'm joking. I'm joking. I'm joking because I, like a lot of people have a real sickness about this. And sometimes I'll just be like, I mean, literally, it'll be, I don't know, 11:45 at night, I'll be on my laptop. Sometimes Kate peaks around, and she's like, "Are you looking at real estate?" And I'm just like, "What does $600,000 buy in Biloxi, Mississippi?" And it's like-

JUSTIN FOX: It's a lot, I bet!

CHRIS HAYES: ... "Wow, that's a lot. You can get a lot of house with a pool in Biloxi. Huh, what would life be like in Biloxi?"

JUSTIN FOX: You'd have to learn to pronounce it Biloxi though.

CHRIS HAYES: Yes. That would probably be my first start. But the transformation of the house buyer because of the Zillow age is a really interesting thing to consider because there was an SNL sketch about it that was in COVID. And I think it was a lot of people stuck in small spaces and daydreaming about larger places, but it has to have really altered consumer behavior to have everything at the touch of a fingertip. Every house that's on the market in America, you could look at right now.

JUSTIN FOX: Right. And that's something that I think is underappreciated. And it's hard to measure what role that plays. And so basically as the year went on, even as the big cities that had emptied out, people started coming back. And rents have been going up in New York to a lesser extent in San Francisco. And first of all, you still have that imbalance where the demand is focused on mostly smaller markets. So that's going to cause prices to rise in more places, but I'm struggling to get my head around what's going on now, which is the prices are basically going up everywhere. And yeah, there are longer term reasons for that. There's this huge generation of people who are several years behind previous generations in things like buying a house.

And there was lots written early on about the unique preferences of the millennials. I think it's become clearer and clearer. It's just that they were poor. I mean, they came into the workforce at the absolute worst possible time at the end of this awful recession or during it. And so, on one hand there's this huge seeming pent-up demand, on the other hand lending standards have not gotten any looser as a reaction, maybe overreaction to what happened during the housing bubble of the 2000s. And so it's not everybody who can participate in this thing, it's you need a pretty big down payment. And in a lot of these people moving to various lovely places around the country, it's the all-cash buyers who are winning.

CHRIS HAYES: Right. So in a place like Bozeman, where you mentioned before, I mean, that seems like that's an interesting situation because it seems like that's people with a fair amount of money, quite a lot of probably freedom. We're talking about a small group of fairly affluent people, but it doesn't take that many because Bozeman is just not a big real estate market. So you could pretty much overwhelm that real estate market and cause all sorts of crazy bidding wars with not that many people just deciding, "Hey, why don't I live in Bozeman?"

JUSTIN FOX: Yeah. I mean, that is a lot of it, and I think to some extent it's caused, I got to think a bunch of these places are going to have a hangover from that in the coming years. But as with all these things, you just don't know when.

CHRIS HAYES: Well, there's a bigger question here that has to do with a set of really interesting nested questions about office life in America. We started doing the show completely remotely the first week of lockdown. And a week before that, if you said, "We're going to produce and broadcast a live hour of cable news with no one except maybe one or two people at 30 Rock. The host isn't going to be there, the line producer isn't going to be there." I mean, normally the way that our work works is that we come to the office and then everyone goes into the control room. There's a director in the control room, there's an EP and a prompter operator. There are segment producers there. Everyone's in there. They're all talking to each other. I'm in front of a camera. I've got an IFB. It's all there and there's very specialized equipment that has been created to produce this. Our work product is not sharing a Google Doc. So we gotta make this thing. And within a week we figured out how to do it remotely. I mean, that's happened across all kinds of industries that are all gonna have ramifications going forward about whether people need to come to the office.

JUSTIN FOX: Yeah. And I mean, clearly, they have this value. It's valuable sometimes to hang out with people in person and have informal conversations of a sort, but things should be different. One of those classic things, there's the classic story about why it took so long for there to be productivity gains from the arrival of electricity. And it was because initially they just plugged it into existing factories and it wasn't until they'd redesigned them all that it made a big difference and with the internet, especially, it's that question of why isn't there been more of a productivity gain? Well, maybe it's because we needed to reorganize how we did work and maybe this is going to give this big push forward. And obviously that has big real estate implications.

JUSTIN FOX: One thing I keep thinking of is there's this famous paper by two economists, Chang-Tai Hsieh and Enrico Moretti, that was published in 2019, but has been making the rounds before. It was this sort of attempt to calculate the economic cost of all the sort of NIMBY things and regulations keeping more housing from being built in places like New York and San Francisco and Los Angeles. And they came up with this calculation, it obviously had a lot of assumptions in it, but that it had reduced US GDP by 8.9%. And then actually this year, another economist ran all the calculations and found out they'd made a mistake and it was really 36%.


JUSTIN FOX: And so it's like, "Okay, here's this huge, this thing that's been holding the economy back because we're not able to build enough housing near these jobs centers. Maybe this is an opportunity to get around that at least a little bit." That's the one positive way to view this whole office shift beyond just the fact that some people will not have to go on ridiculous commutes as many did.

CHRIS HAYES: Those two aspects of our economic geographic housing life seemed just so core. There's jobs, people tend to leave places where there are not a lot of jobs. They tend to go to places where there are jobs when you look at inflows and outflows. And then, you have to have housing to keep up with that. And there's obviously commuting is a huge part of people's lives. There's all kinds of interesting new surveys about how is housing gets more expensive, people spend more time commuting and the more time commute they are, the less happy they are controlling for everything else. Long commutes is one of the things most guaranteed to make people miserable. So now you've got this idea of, if you can really unlock and people have been talking about this for 20 years, since the dawn of the Internet, can really unlock where you live from where you work, it could transform everything. I guess the question is how enduring do we think those changes are going to be?

JUSTIN FOX: I mean, not as enduring as they look right now, but probably pretty enduring. I mean, I just think it's just shifted and is having it coincide with a labor market situation where the prime-age population just isn't going to grow much over the next 20 years, barring unforeseen events. You've just got this situation where employers, it seems like a lot of employees like it and some employers have embraced it, ones that haven't are probably going to encounter some difficulties. I mean, one thing on a sort of getting beyond the lives of those people, which in many cases are improved, once again, this is maybe 20% of the workforce we're talking about or 30% who are able to do this.

JUSTIN FOX: The whole remote work thing is something that, for people with white-collar jobs and college educations. There aren't many opportunities for everybody else. And when you look at what's been going on with real estate markets is you have all these people who probably felt pretty poor in Silicon Valley or New York, but are now among the richer people out in some distant suburb or smaller city where they've moved and their buying in is making it harder for people in those places who are just making local incomes and can't work remotely to afford housing.

CHRIS HAYES: That's a great point. Right. I mean, there could be effects in both directions because the degree that you're, and again, the people we're talking about is a very small sliver. It's 20, 25% right of the American workforce maybe. But it's also, a part of the workforce that has a lot of weight in terms of the market power and what it does to both development and politics. The good thing I could see happening is, to the extent that those people are further from the city, that taking some of the price pressure away from these actual metro urban areas. But then to the extent it does that, just squeezing the balloon, it get put more pressure on those smaller localities it might be going to where they're coming in with all cash offers and they can buy a house for $500,000 in cash two hours outside San Francisco, but in San Francisco they couldn't have gotten an eighth of that price.

JUSTIN FOX: Right. Yeah. I mean, I go back and forth between being optimistic and pessimistic about it. When you think about it, high real estate prices have been, in many ways, the problem of New York City over the past decade or so. And so, "Okay, great. Maybe there'll be a little bit lower going forward." But they're not going enough lower to really suddenly make non-rent controlled, non-subsidized housing affordable to about half of New Yorkers. And then it's having these interesting effects elsewhere. Obviously, some of the places where lots of people are moving are places that don't have either the regulatory or physical constraints on building new housing that New York or San Francisco do. So some of them, maybe that will be able to moderate the price increases. Again, not your Bozemans, but maybe your Phoenixes, your Las Vegases, Boise and such. So yeah, I don't know whether to feel positive about it or not.

CHRIS HAYES: I mean, one of the other things that we see broadly, a broad trend is people moving from places that have winter to places that don't have winter.


CHRIS HAYES: The Sun Belt, basically the Sun Belt in the Pacific Northwest, obviously they have winter in the Pacific Northwest. It rains all winter, but it doesn't get super cold. Those are places with population growth. Florida has population growth. Georgia has population growth. Texas, huge population growth, Arizona, Nevada. And also those are-

JUSTIN FOX: I mean, Sioux Falls and Fargo have a lot of population growth too, but it's probably a pretty small base and it's very cold there in the winter. But yes, in general, you're absolutely right. And when I did that, I think you mentioned before that the column where Orlando came out worse in affordability than the San Francisco metro area, this was just dividing rent by median income. There's a bunch of places that come off great that are actually, to me really attractive, like Pittsburgh and Louisville. And I mean, Louisville is not that cold. Birmingham, Alabama. But I don't get the sense that those places have been experiencing huge booms. I mean, in fact, I think Pittsburgh is really struggling over the course of the pandemic.

CHRIS HAYES: Yeah. Pittsburgh's an interesting story because that's such an incredible town. Pittsburgh has had a very different trajectory than the city like Cleveland because of universities and hospitals and a lot of 21st century job development that allowed it to escape the fate of a place like Cleveland that had a huge kind of hollowing out happen. Why was Orlando worse than San Francisco?

JUSTIN FOX: I mean, I think it's just because it's that, I mean, part of it may have, I doubt this was a factor, but I was measuring using apartment lists, latest estimate of apartment rents and some BLS median wage from a year and a half ago. But I think in reality wages haven't gone up that much in Orlando, it's just a bunch of people with money move there. And so I think in all of these places, and those people will raise the median wage a little bit, but not enough to really make that big a difference. And so, yeah, what's happening is that as more people who can work anywhere move to cheaper places that puts the squeeze on people in those places who can't work anywhere.

And some of that can't be avoided, and again, a lot of these are places that are still growing and we'll be able to accommodate that over time, but it is still this interesting... I mean, so much in this country gets especially analysis of things like this. It's all focused on the most affluent 25% or so of Americans, because they're the ones who are subscribing to the various media properties that report about it. And even more so in financial media, it's more like the top 10%. And they make more noise and they just have all this market power. And so it's just things that are very positive for somebody who's a mid-level worker in a white-collar job and that's great, but they do have all sorts of side effects for other people.

CHRIS HAYES: Yeah. I want to talk a little bit about how we should think about where we are in housing now and housing policy and how to make things better for the 75% who are not in that category right after we take this quick break.

So you make a great point about how a lot of these housing market dynamics and the entire world of real estate coverage and all the shows that are on cable television about home remodeling, or finding the right house. That's a fairly thin strata of Americans that's pitched to. What are things that we should be doing to make housing more accessible, more affordable for working-class people, the working poor, people without college degrees and white-collar jobs?

JUSTIN FOX: I mean, if I had a simple answer to that, I'd probably quit what I do, or at least spend all my time writing about it. I mean, the simple answer is build more housing in expensive places, but obviously that's hard and those places will still be pretty expensive. So another issue that comes up a lot is, "Okay, we'll create jobs in less expensive places." And again, maybe there are some new opportunities for that, and clearly there're success stories like Pittsburgh, although, I mean, the thing with Pittsburgh is it's created a good amount of nice new white-collar jobs, but the metropolitan area has kept shrinking and had very little, or no job growth for decades. So it's created this cool new thing, and that's great, and it may keep growing into more, but it hasn't suddenly made the whole area into this boomtown.

CHRIS HAYES: Well, but then I think part of it too has to do with just the wage issue, which is that, when you think about what... I remember going to, I'll never forget this. I went to interview once an auto worker, retired auto worker in Grand Rapids, Michigan. And just, he'd been a union autoworker his all life. And I rolled up to his house in Grand Rapids, beautiful house. And I was fairly young at that point in my career. I was thinking about writing something about Detroit, ended up not doing the story. This was actually going to be part of my book, but I had the great day with him and he gave me lunch and we talked. But I remember just looking at this place, being like, "This," and I was from New York City. And I was like, "This is the house of like a surgeon in New York." And this is a house of an auto worker, and part of it is housing is cheaper than Grand Rapids in New York, yes, but also he made a really good living as an auto worker.

And the equivalent now, which is an Amazon warehouse worker or whatever, we have created this low wage economy that doesn't give people a lot of purchasing power. And so you've got this real bifurcation of, yeah, there's the 20% with college degrees who live in a fairly constrained set of places where they all feel like, "Woe, is me and poor," because in a relative sense they're competing for these houses where there's not a lot of new supply. And then you've got a huge workforce that just doesn't have a lot of purchasing power, period, because wages have stagnated for decades.

JUSTIN FOX: Yeah. And I mean, and I should've mentioned that before. I mean, obviously inequality plays a big role in this. If you have bigger distances between people's resources, then it creates these real estate dynamics that are harder for those with less. I mean, one interesting thing is it does seem this wage stagnation has kind of reversed over the last five years or so, maybe 10 years. And it's at this point, and inequality by most measures has been decreasing since about 2012, but it's kind of baby steps at this point. So obviously that's a big part of it. That's a much bigger economic question than just the real estate market.

One other thing is, I mean, Grand Rapids is actually one of those places that's sort of at the sweet spot of real estate is still affordable, the economy is growing pretty well. They're attracting a lot of young educated people. And it's doing really, really well. And maybe it's because, it's not auto workers anymore, it's the people at Herman Miller and Steelcase and stuff and a bunch of other things, but somehow rather, there's enough of a working class, middle class to keep that working there.

CHRIS HAYES: I mean, that to me is, that's the real, the nut to crack. It's creating an economy that has a middle-class. And the three things, housing is one of them, but housing, education, health care, all these things, the big metro economic trends of the US is that consumer goods have gotten cheaper and cheaper. We've had the sustained disinflation period from, basically 1980 until the last few months in which that changed quite a bit. It's unclear whether that's temporary or not.

But you've got this period in which consumer goods have gotten cheaper, wages have largely stagnated, inequality has risen. And the three core things that make you feel like a secure middle-class person, which is that you've got good housing, you've got good healthcare and your kids can get educated, have all gone up crazy amounts in terms of expense. And that I think creates this kind of squeeze. The question is housing is one of those triumph that are goods that you want to create a society in which a lot of people can access, as many people as possible, everyone, the security of what we think of as those sort of core goods.

JUSTIN FOX: Yeah. And I mean, it is interesting because there are definitely a bunch of countries with somewhat more equal income distribution and more equal provision of healthcare and education that still have these crazy housing markets. I mean, like Vancouver or Auckland or London, and maybe until recently, Amsterdam. So the housing thing I think goes beyond just the inequality issue. And when you think about it, in the 19th century, there was this whole, among economists and social reformers and everything, this idea that land was really scarce and that landowners needed to either to be, have their land taken away from them and have it collectively owned, or they just needed to be taxed really strongly was the belief of everybody from Adam Smith on left.

And then I think we had this period in the early 20th century where suddenly land wasn't that important, maybe because new transportation technologies suddenly opened up all this new land around big cities where people could live. And now we're back to that point. And in really in demand places like New York you wonder if some of the solutions have to do with the New York, the Housing Authority is a mess, but projects like that probably are part of the only way you make housing affordable for the people in the bottom third of the income distribution, maybe even the bottom half.

And I think all of that has been thrown out the window in a lot of countries, not just the US, partly because in so many cases it's been mismanaged, but I don't know how you get around that. I mean, in New York City, at some point, a lot of people just can't even afford to pay the rent that would basically pay to keep an apartment maintained and heated and everything else in the city. And yet we need those people in the city. And so it calls for different ways of thinking about housing than just, "Gee, let's make sure we have more of it."

CHRIS HAYES: Well, and it also, I mean, one of the things that I've seen up close is, just in my own dealing in real estate markets, as a person who is very lucky to have access to capital and have a very remunerative job, it's a lot of things. It's easier the more money you have, you get just a lot of discounts for being rich. On capital, for instance, I mean, you can get crazy mortgage rates if you're putting a lot of money down you could get more exotic mortgage products.

Now, again, that kind of stuff was democratized. In 2007, it didn't lead to a particularly good place even though it was a mix, I think of greed, cynicism and some ideological belief that access to capital should be democratized and everyone should be able to get a house with 10% down and interest only, yada, yada. But you really do see how much access to capital, either having it in savings or in the market, liquid investments that you can sell and being approved and the premium on the mortgage you're paying like, "Oh, that just makes an enormous difference in this. That just creates different universes for people." And then there's the entire group of people that are renting for whom that's not even an issue, but who are essentially at the whims downstream of the people that are doing that.

JUSTIN FOX: Yeah. I mean, I don't have any real, it's just, life is unfair and real estate is especially unfair. It seems to accentuate whatever disparities and inequalities we have everywhere else. And it seemed like there was this grand, especially post World War II with the building out of the suburbs, but then in earlier eras in the US with homesteading and other things that at least for some segment of the population, it was like, "No, this is something for, everyone can have. There are no limits on it." And it's just, I don't know that, that works once a place is developed.

Going back to the Pittsburgh, Grand Rapids, wherever, there are places, I'm a big fan of Omaha too, and that's another place that's actually growing. It's pretty affordable. It's a nice place. But they're just all of these places that are places with tons of infrastructure, like a Rochester or a Buffalo or a Cleveland, they have tons of super cheap housing, but a pretty limited number of people wanting to move there.

CHRIS HAYES: Yeah. Right. Yeah. There's a lot of places where expensive housing is not the problem, it's that the housing is cheap, is just there's no jobs and there's no economic dynamism. And those two things are related. That is the thing. It's like, how do you get that middle space? How do you get that because there's a Goldilocks situation in which you're growing and you're generating jobs and giving people a shot and your housing market's not going crazy. And it seems like keeping that equilibrium is really, is a difficult thing. And some places can do it, but at any one given moment, a huge amount of places are either on one side or the other of that kind of seesaw.

JUSTIN FOX: Yeah. The places in the sweet spot are relatively rare.

CHRIS HAYES: One of the other big housing stories of the pandemic was the eviction moratorium which was put into place by the CDC, through its authority, then there was a statutory aspect to it. And some of the Relief Legislation. There was a New York Times story the other day about this landlord in Queens who is I think a healthcare worker of some kind, and she rents out this basement apartment and her tenants are, according to the perspective of the woman, I think, her tenants are terrible and they're taunting their landlord and they can't leave.

And there was a lot of eye-rolling about that piece, but it does seem to me that there is some, the eviction moratorium made complete sense. I think extending it indefinitely, probably doesn't. Eviction is a horrible thing. We should have more affordable housing options, but figuring out what to do next on that front seems a very thorny policy issue.

JUSTIN FOX: Yeah. I mean, I feel like at some point in this discussion, I should mention that I don't cover real estate regularly. Eviction is something I've kept thinking I should look into. I write columns on all sorts of different things. And every once in a while, if I feel like there's some data that I think has been ignored or I'm just curious, I jump into it. And eviction, I think it's kind of been this amazing thing that this country has actually been able to do that for a year, but I really don't know where it goes from here. I mean, I really like that, I think out in California, and I don't know if other places are doing it is the state is taking some of its big tax windfall and the money it's gotten from the federal government and it's actually going to pay the back rent for people so they can stay in their apartments.

CHRIS HAYES: That seems to me like the way to square the circle here because there's a lot of money to come into these municipalities and there's a big question of what they're going to do with it. And that seems to me like a way to, sort of path of least resistance and essentially make everyone whole. If you say, "This happened through no fault of anyone's. And we didn't want to keep you on the street." Good. But forcing landlords to subsidize that because of a pandemic, you could change policy, but that doesn't seem particularly justified. So if you have the money just smooth it all out that way.

JUSTIN FOX: And I mean, that's sort of the issue in general with providing below market cost housing is, in any, if you think about it in broader economic terms, it's always got to be better for everybody to chip in with tax dollars and use that to subsidize but the sort of reality is that those subsidies generally don't survive for long. And it's totally understandable that tenants in places like New York favor something like rent control, which, it's sort of asking landlords to shoulder this affordable housing burden that the city as a whole, its inhabitants as a whole, are not willing to do.

And some landlords have made tons of money and can totally do it. And many others bought into the market in full knowledge that they would have this restriction on their incomes, but it's not the most efficient way to do it, it does seem to be the most durable way to do it, which is why it survives, whereas most subsidized housing programs sort of, right now, where at this moment where there's a bunch of money and also there's general feeling that people who encountered misfortune over the past year and a half, the usual narratives of it being their own fault aren't as strong as they usually are in the US. And so it's this unique moment, but I wouldn't count on it being that way every year for the next 20.

CHRIS HAYES: Prices in housing matter to a lot of people, but it's just one component of cost. Living, and I thought maybe we could just talk a little bit about another adjacent macroeconomic issue which is, the inflation debate right now. We've seen consumer price index which is the metric we use to measure inflation has gone up really big amounts. Then there's a lot of interesting debates about whether we're entering some new more inflationary period and that's dangerous, or that it's transitory because when you unpack the data, you see like, "Oh, airfares are up 83% year-over-year." Well, of course they are, and flying last year. Used cars and automobiles because there was this kind of, a lot of the factories shut down. There was a weird ship shortage coming out of Japan. And then you had this situation where there was basically no demand and no one working in car factories for a while, and then all of a sudden people want to buy cars, they had disposable income.

JUSTIN FOX: And then the rental car companies sold much of their fleets. And one other interesting thing is there've been far fewer repossessions of cars which usually flow into that market.

CHRIS HAYES: Oh, that's interesting. And I guess that's because of COVID relief that people have been... Yeah. It's funny when you tell people the United States had in some ways the biggest fiscal response to COVID of peer countries, people think you're lying or that's crazy, or we didn't do anything, but in percentage GDP terms, it's true. Now, it's not quite apples to apples because other countries already have automatic stabilizers through their social safety net that we're doing a lot of work that we don't have. So we had to just write a bunch of checks much more.

JUSTIN FOX: Yeah. I mean, I think, definitely other countries were able to direct it in a better way, but in terms of just the overall as a share of the economy and also just the generosity to most individuals. The whole thing is, some people didn't get anything, but for those who got stuff, it was a pretty generous set up, not just by US standards, but globally which is a remarkable thing. And again, it's partly that you suddenly had a Democratic Party that wants to do this and then a president who was normally a Republican but didn't really care about any of the old Republican stuff about not giving money away.

CHRIS HAYES: He wanted to get reelected and I think he thought that would help him more specifically.

JUSTIN FOX: And I mean, and who knows how much of this stuff lasts? I mean, I think that the checks for families with kids that are going out now is so long overdue in the US and I think it's a really good thing that actually is really an investment in the future more than anything else, because if children don't grow up in poverty, they usually end up generating more tax dollars later if you want to focus it that way. But now I'm spacing out, what was the initial question?

CHRIS HAYES: So I had run through the inflation stories and the kind of like the more permanent era of inflation versus the transitory. And I'm just curious where you are on that and the people that you talk to where they are.

JUSTIN FOX: I mean, I'm mostly on the transitory side. And again, this is not something I cover every day, but I spent a couple of days a few weeks ago looking at, there's so much focus on the '70s inflation because people can remember it and it was bad. But before, the two bigger, at least sharper episodes of inflation were right after World War II and right after World War I. And it feels like in a lot of ways, this is more like those than it is like the '70s, because it's very much about an economy after having done one thing, suddenly having to shift very quickly to something else. People having to be repurposed to different jobs and lots of shortages, lots of people suddenly being able to live their lives as they wanted after several years of probation and rationing and whatever else.

And those both, they were huge inflation, but then they went away. I mean, the '20s one is kind of a disaster. The Fed about halfway through it decided to crack down and ended up with one of the steepest recessions in history, although it ended very quickly. In the '40s it was, there wasn't much Fed reaction at that point. They were still under orders from the Treasury Department to keep rates on various durations of Treasury securities at certain levels. And they finally got rid of that a few years after World War II, but they mostly held back. And there was the inflation, then a bit of a dip. And then it was kind of okay. There was another little episode during the Korean War.

Like lot of people at Bloomberg, I'm obsessed with the lumber futures. And they went up like crazy and now they've gone back to basically not abnormal levels at all, still a little high. And so that's clearly this case of, that was transitory. I think that's what it's going to be in most things, but I mean the way it works in our modern world is, it's not that we're going to go back to the prices we had before the pandemic, it's just the prices will stop rising and most things. So I'm not super worried about it, but I totally get that, man, if you need to rent a car or buy a used car right now, inflation's really bad.

CHRIS HAYES: Yeah. I don't want to sort of downplay it. It’s just that the fear of inflation and the Fed's actions and Volcker when he was Fed chair in the late 1970s and very famously, essentially waterboarded the economy to bring inflation down, initiate a recession. There's lots of people who look at that as a dawn of the peak sort of neoliberal era, Reagan, Thatcher, huge crackdowns on labor power, views of labor powers being the source of inflation. Inflation as a kind of the tip of the spear for short of a war on a more equitable economy.

And I think there's fear about that now, but it also seems to me that, even when the politics of it, of the Republican Party saying, "Look at Chipotle, they're raising their wages to $15 and you're going to have to pay more for a burrito." And it's like, "Well, but you're also saying you don't want those people to make $15." And I'm not that clear which side is the better side of that argument.

JUSTIN FOX: Yeah. I mean, I feel like it's totally understandable for people to worry about this and things could go wrong, but I also think the bulk of the, "Oh my God, it's the '70s over again," is mostly just political hackdom, people just saying whatever you say to make the current regime look bad, even though we would be having this exact same inflation under a Republican president too. I mean, it's just, this is what is happening. I mean, I may be a little less because there wouldn't have been that stimulus the one in, when was that? March past, but I doubt it would've made much difference.

CHRIS HAYES: The way I think of it a lot is when you're waiting for, if you're in the subway and a train for some reason doesn't come because it got held up. And what happens is, over enough time, the platform has twice as many people as should be there for the train to come. And that's cascaded down the entire line. So now, twice as many people try to get on this train, which cannot accommodate them. So some people stay back. And then that train when it goes to the next stop is completely packed. And it just works itself out after a while, but for the first period it's like we have these kinds of traffic jams that are representing themselves in higher prices. And it sucks right now, but I do think it will work itself out.

And I think, maybe the place to end here is, I do think there's news about this infrastructure bill. You talked about the fact that actually we saw some wage growth. We saw particularly wage growth at the bottom in '18 and '19 that came from, I think, to Jay Powell's credit, partly came from a Fed running the economy hot. And again, Donald Trump wanted to get reelected and jawboning Jay Powell's about that because he wanted the economy to run hot. And that, running an economy hot, getting unemployment rate low, you start to see more worker power, you gotta start to see wages go up. There's in some cases, I think you see people are more, think about unionization more when they have a little more worker power and leverage. And the big question for me is, can we get back to that on the other side of COVID so that we have an economy where we really are seeing wages rise and we're seeing more worker power in a sustained fashion for a few years?

JUSTIN FOX: I think, yes, in part because the scale of the relief efforts during COVID mean that most of the things that usually happened during recessions didn't happen. Lots of people lost their jobs, that's for sure, but almost all the other metrics of people's assets and how much money they have saved and almost everything else held up. And like I talked about the cars being dispossessed, being repossessed, things held up pretty well. And I think that's part of what's going on in the labor market right now is people aren't as desperate as they usually are coming out of a recession. They consider it and think about it a little bit.

And obviously that's very frustrating for some business owners, butI feel really good about the next five or 10 years in the economy, but who knows? It just feels like we bottomed out at some point around the 2008, 2009 recession. And because it was so bad, a lot of the economic indicators kept slumping for a couple of years after that. But in so many things that had basically all the things that had been either declining or going up since 1980, a lot of them reversed right around 2012, I mean, really simple one is just manufacturing's share of employment, which had been going down, down, down, and then it just plummeted. It fell pretty steadily during the 2000s even when the economy was growing and then just plummeted during the recession. And that's generally been on an upward trend. And obviously everything dropped during the recession, but I don't know.

And the interesting thing though is whether the housing market can be a positive part of all that too, or will keep being, because one of the things that's interesting is the homeownership rate skyrocketed for a couple of quarters there during 2020 in what I think turns out to be totally just a artifact of the survey taking and the fact that people who didn't own homes were less likely to respond to the current population survey which is what they get that from. And it's basically back in the first quarter, back to trend or even a little bit below what it had been before the pandemic. And so it's interesting after this, all these people buying houses, home ownership maybe hasn't gone up.

CHRIS HAYES: Justin Fox is a columnist of Bloomberg Opinion, author of the Myth of the Rational Market. He writes about macroeconomic issues, including housing. Justin, it was great to have you in the program.

JUSTIN FOX: It was a pleasure talking to you.

CHRIS HAYES: Once again, great thanks to Justin Fox, columnist of Bloomberg Opinion. You can find all his articles at Bloomberg Opinion.

Tweet us with the hashtag #WITHpod, email “Why Is This Happening?” is presented by MSNBC and NBC News, produced by the “All In” team and features music by Eddie Cooper. You can see more of our work, including links to things we mentioned here, by going to