Housing and The Slope

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When we speak about housing we have to remember about four aspects of policy in housing which very integrated i.e, public housing, taxation, mortgage rates and regulation that consist of rent control and land use. On the other hand, we need to think about the objective of housing policy.

The first objective of housing policy is ensure the minimum level of housing policy. Sally (October, 2) said that the government take a part in making the minimum level of housing price. It means for the poor people who can not buy house and loss when deal with the market should be subsided by the government using policy. The second, the policy maker should doing something to make stabilize rent and asset prices. This is also the same concept on the first objective. The third concept is to increase or to maintain new constractions or maintain and improve of existing stuck. In additon, to stabilize business cyclies also the main point of the objective of housing policy. Get through to the fifth objective that is faster community development and the last is racial and economy development.

The role of objective have been support by the fact which happen in the past. In 1989 there wer 1,5 milion of U.S citizent (less than 2 % population) house hold is very poor, they had only $ 6571. On that time there were 35% of H.H in U.S reported have no income, 50 % of them are black and 12% of them are hispanic.

The question is come after we be acquainted with the fact that a lot of people are very poor and the government took place to make them get housing, is this spending efficient? Before we answer about the efficiency, it is better to understand what is efficiency actually? Based on the lecturer in class, efficiency covers the distibution space, we can say that the policy is efficient when all the people get as the motive as they need. On the other word, every people will not value in the equal amount. More ever the efficienty can accur in the equlibrium i.e all people doesn’t obtain the incentive to move. We can stated that supply and demand is balance.

In housing market models, the factor that include on the agregation are price and quantity of housing. The relation of the two factors is when the price of housing decrease it influence the quantity of housing getting increase (Dh), in contrast the supply of housing will decrease (Sh). Suppose that the price of housing is $ 1000, and there are Q # of housing. By this condition people who only have money $ 600 can not joint in the market, they can not buy the house since there are $400 price distances. (Erda)Oct,2. PLAN 603

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