Wednesday, April 8, 2009

How Future Consumer (Market)-Demanded New Housing Will Help Reduce GHG Emissions

According to the National Association of Home Builders Housing Facts, Figures and Trends, March 2006, the square footage of housing grew from 983 square feet in 1950 to 2,350 square feet in 2004. When the lethargic housing recovery comes (lethargic because interest rates will be rising due to national debt crowding out private and business borrowing and current homeowners will not be moving so fast), baby boom homebuyers will be downsizing from their McMansions toward smaller ranch houses, townhomes and condos.

This recession is sobering consumers like nothing else could other than aging. By 2020 or so, there will be more people over 65 than under 18. Not good for housing or consumables but great for health care and services. Older people consume services, younger people goods. Once again, the baby boom will change everything. Are you ready?

Over the next 10 years, large numbers of people will be stuck owning homes for which there will be few buyers. This return to rationality, “living within our collective means” will reduce consumer energy consumption and cut GHG output. All of this by market forces rather than government mandate.

By the way, the way to recapitalize the banks is to mandate all banks receiving TARP funds to pay 5% passbook savings. While this is not pure market, it does get the taxpayer something for their generous bailout of the irresponsible banks.

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