iiinova — where your digital self keeps evolving

Cameron LaPoint @cslapoint.bsky.social · 18/01/2025

California's lackluster permitting (+ New England's) is even more stark if you look at permits per capita in a longer-run context. From our paper on 100 years of building permits in the US: papers.ssrn.com/abstract=485...

190

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

11/ Armed with permits in particular areas as a leading indicator, policymakers might be able to prevent runaway housing market booms by restricting credit access in markets headed towards “overbuilding” risk, such as Austin, TX and other reservoirs for “digital nomads” over the past two years.

120

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

10/ One stark example of the soft info permits contain comes from the 2000s subprime mortgage crisis. Areas which had the largest concentration of subprime MBS loans as of 2005 are the same states where swings in permits predict asset market movements a year later.

120

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

7/ This was a massive data effort, which took us and a team of RAs nearly 3 years. We used advanced OCR and deep learning techniques to digitize historical records, allowing us to cover all 50 states and the largest 60 MSAs (with an extension to all 3,000+ counties in the coming months!)

150

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

6/ In most states, new housing permits per capita peaked in the 1970s. After the Great Recession, permits collapsed, recovering somewhat in the sunbelt states which have experienced large net migration over the last 30 years. New housing supply appears unable to accommodate demand from residents.

130

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

5/ Beyond predicting financial downturns, we use our data to establish new facts about long-run housing supply. > 80% permits for single-family homes are completed, meaning permits often translate to new housing units. Avg. completion rates are much lower in high-regulation regions like New England.

140

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

Regulations increase construction costs, reducing permits, and creating longer, more variable lags between permit applications and new housing units completed. This can be seen in the strong negative correlation between permits and measures of regulatory stringency, such as the "Wharton Index."

120

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

3/ Geographic variation matters a lot. Housing supply-elastic states like Florida, where land use regulations are lax, are bellwethers. In contrast, states like Connecticut, where policies render it difficult to build, have very little ability to predict downturns.

170

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

2/ Key finding: Boom-bust cycles in residential building permits, as captured by building permit growth (BPG) volatility, are a harbinger for future stock and bond market fluctuations across most recessions over the last century.

151

Cameron LaPoint @cslapoint.bsky.social · 27/11/2024

Excited to debut my new paper, "Housing Is the Financial Cycle: Evidence from 100 Years of Local Building Permits,” joint with @cortesgustavos.bsky.social. We document that building permits predict financial market volatility across a century of U.S. economic history. papers.ssrn.com/abstract=485...

58224

Cameron LaPoint @cslapoint.bsky.social · 05/11/2024

Property Assessed Clean Energy (PACE) loans are a new low-screening contract which allow homeowners to borrow through their property taxes to fund climate-resiliency and energy efficiency home improvements. This is a timely topic given continued rebuilding efforts from Hurricane Helene and Milton.

010