In most cases, market forces will reassert themselves, but he thought it unlikely for house prices to fall far enough in Austin—where prices rose in some cases as much as 100% during the pandemic—for house cleaners to afford to buy homes in the city.
And yes, said Brooke Harrington, a professor of sociology at Dartmouth College, in an interview on Wednesday. Extreme inequality does have an impact. “It’s deeply destabilizing to a functioning, modern economic society” for schoolteachers and firefighters and shopkeepers to have to live two hours away from where they work. And police who don’t live in their communities become “just functionaries. They leave at the end of the day.” And that results in problems with morale and performance.
As for the lucky residents themselves, “isolation breeds isolation,” said Harrington. “Their isolation allows them to develop some weird ideas—such as, that they’re descended from the pharaohs.”
How the Federal Reserve’s war on inflation will affect the ranks of the rich is unknown, but I suspect, not much, and not for long. This demographic’s seemingly insatiable demand isn’t some sort of pandemic-produced aberration. There are more of them. Get used to it.
(Joe Mysak is a municipal market columnist who writes for Bloomberg. His opinions do not necessarily reflect those of Bloomberg LP and its owner, and his observations are not intended as investment advice.)
This article was provided by Bloomberg News.