Summary
Phil illustrates Economic Rent with Churchill’s 1909 bridge toll story: when a penny toll was removed by taxpayers, rents on the south side of the Thames rose by exactly one penny within weeks — capturing all the benefit. Bloomberg reports that record-low mortgage rates pushed US housing affordability to a 12-year low (Q4 2020: buyers needing 30% of average wage for a typical home). Bank of England study (September 2019): rising UK house prices since 2000 are “almost entirely explained by lower interest rates.”
Key Claims
- Churchill 1909: removing a Thames bridge toll → rents on the south side rose by exactly the same amount. — confidence: high
- Low mortgage rates drive house prices up, not affordability up — gains go to landowners. — confidence: high
- US homebuyers needed ~30% of average wages to afford a typical home in Q4 2020 — 12-year worst. — confidence: high
- Bank of England 2019: UK house price rises since 2000 “almost entirely explained by lower interest rates.” — confidence: high