The local housing market in Grand Forks will soon be a major topic again with new findings released. I will wait to pass final judgement until research design is clear and we can evaluate methodology. There are a few things we should repeat so they are clear.
A few listeners brought up the issue of housing prices in Grand Forks, which as we all know is just my favorite topic. I thought that it would be important to discuss again for a few reasons. (This is likely a longer post, you might want to get out now.)
Pretty much anytime I give a talk or go on to KNOX radio I get questions about the pace of apartment building in Grand Forks. People believe fundamentals do not justify the extent to which construction currently occurs. I generally agree and think there are a few reasons behind it. This article from the Wall Street Journal seems to indicate the local circumstances may just be part of a larger national trend.
A proper investigation of issues in housing requires a look beyond the price. As I mentioned, price can be indicative of an issue, but is not the source or cause of the issue. In the same way your sore throat may be caused by a sinus infection, if you fail to look for the root cause you may treat the condition inappropriately.
As a topic, the economics of housing in North Dakota creates a significant amount of debate. This debate lacks consistency, ground rules, and facts. Most of the discussion takes place under the umbrella term of “affordable housing.” On numerous occasions I indicated the inadequacy of this term. The first problem is that it seems assumed the mere assertion of an “affordable housing” problem is adequate substitute for actual evidence of a problem. The second is a failure to recognize the differing nature of a potential problem when we are talking about a retired couple, a newly married young couple, or a family of five. An “affordable housing” problem for each of these three groups could look significantly different and require drastically different solutions. How much of a solution do we want? There are times it seems people want a 100% solution, by which I mean everyone that wants a house should have one in their price range. It is not that kind of world! Let’s make sure it is on the block they want too.
Housing remains a frequent topic of discussion for people in North Dakota. Most of the discussion falls under the heading of “affordability”, a suitably vague term essentially guaranteeing little to no progress on the issue, if it is a problem at all. What is the affordability issue? My suspicion is that people are thinking of something similar to the following graph:
Housing issues of all sorts are a hot topic nationally, not just in Grand Forks or North Dakota. I thought we could look at price levels for three different geographic regions. The first is the Grand Forks metro area since that is one of the topics most frequently mentioned in my appearances on the Jarrod Thomas Show (1310 KNOX radio in Grand Forks). The next area is North Dakota and the last is the United States as a whole.
There was a question from my radio appearance today about the number of renters compared with the number of owners in Grand Forks. At least, I think it was Grand Forks that the emailer asked about. If it was a different geography and they look at this post they can tell me it was something different.
Since housing seems to be a constant topic in Grand Forks I thought I would present some data. The data are consulted far too infrequently in this discussion in my opinion. We still do not address the issue in a proper manner. Price is not the problem, it is the symptom of a problem, if one actually exists. Just as your runny nose is not the problem, but a symptom of a virus, allergy or other issue. If we look to treat only the symptom, we may miss out on the opportunity to fix the source of a problem and things only get worse.
Housing is a common topic of discussion in Grand Forks. Many questions surround the topic, too many in fact. As a frequent contributor to the Jarrod Thomas program (1310 AM Grand Forks), I receive a fair share of these questions. For every question I answer, or attempt to answer, it seems like two take its place. All this because, as I maintained throughout these last few years, we are not asking appropriately defined questions.