In Athens, I have a learned, there is something known as antiparochi. The practice took hold in the middle of the 20th century at a time when Athens was in desperate need of new housing. Supposedly during the 1950s, an estimated 560,000 people came to Athens from the countryside in search of opportunity -- effectively doubling the population of the city. That was a bit of a problem for a city with no money to build new housing. So something needed to be done. The solution was a ground-up arrangement (i.e. it wasn't a government initiative) that allowed developers and contractors to increase the supply of new housing without having to ever pay for land. And given the time period in which this took hold, it also spurred quite the modernist building boom, leaving an architectural legacy that to this day continues to define Athens.

Here's an explanation of how antiparochi works (taken from this BBC article by Alex Sakalis):

Here’s how it worked: a contractor would approach the owner of a house and offer him a deal. He would knock down his house, and build a block of flats in its place. In return, the homeowner would be given a certain number of flats (usually two or three), while the contractor would then make his money by selling the remaining flats to Greeks who were seeking accommodation. Generally, no money was exchanged and no contracts were signed.

What’s so incredible about antiparochi is that it emerged spontaneously out of the housing crisis in Athens. “There was no specific law which told people ‘OK now you have the right to collaborate and build whatever you like’. It was the people themselves that found out this possibility,” says Panos Dragonas, professor of Architecture at the University of Patras.

Even more incredibly, the state completely accepted what its citizens had started doing, introducing only a few minor regulations, such as a maximum height for the apartment buildings – known as polykatoikies in Greek – and a ban on building over archaeological sites or on top of Athens’ seven historical hills. There were no property taxes – the state never made any direct income from antiparochi.

The elegance of antiparochi was that it appeared to solve all of Greece’s problems at once. It provided homeowners and home seekers with modern apartments, while creating enough profit for the contractors to continue investing in construction without state subsidies or bank loans.

Photo by Anastase Maragos on Unsplash

A few years ago I wrote a post talking about "depression babies." In it, I cited a research paper that looked at the impact of macroeconomic shocks on people's willingness to take on financial risk in the future. The term "depression babies" stems from the Great Depression and how it is believed to have impacted risk taking, savings rates, and probably many other things.

I was reminded of this when I read this recent article in the WSJ talking about how the Chinese have started spending -- and taking on the debt -- like Americans, particularly among Chinese under 30. It is the inverse of the depression baby phenomenon. In this case, it is arguably years of economic expansion leading to greater comfort around financial risk.

Here are a couple of figures from the article:

JPMorgan estimates China’s ratio of household debt to gross domestic product will climb to 61% by 2020. That’s up from 26% in 2010 and higher than current levels in Italy and Greece.

The level in the U.S. is about 76%, after falling from 98% in 2006, according to the International Monetary Fund.

By another measure—the ratio of household debt to disposable income—China appears to have already surpassed the U.S. Its ratio reached 117.2% in 2018, up from 42.7% in 2008, according to calculations by Lei Ning, a researcher at the Institute for Advanced Research at Shanghai University of Finance and Economics. The U.S. peaked at 135% in 2007 and dropped to 101% in 2018.

Not surprisingly, the article goes on to talk about how this dramatic increase in household debt might be something to worry about. Maybe. I'm not an economist. But I do think this is designed to boost the Chinese growth machine and I do think it makes them less reliant on other countries -- such as, maybe, the United States.

In Athens, I have a learned, there is something known as antiparochi. The practice took hold in the middle of the 20th century at a time when Athens was in desperate need of new housing. Supposedly during the 1950s, an estimated 560,000 people came to Athens from the countryside in search of opportunity -- effectively doubling the population of the city. That was a bit of a problem for a city with no money to build new housing. So something needed to be done. The solution was a ground-up arrangement (i.e. it wasn't a government initiative) that allowed developers and contractors to increase the supply of new housing without having to ever pay for land. And given the time period in which this took hold, it also spurred quite the modernist building boom, leaving an architectural legacy that to this day continues to define Athens.

Here's an explanation of how antiparochi works (taken from this BBC article by Alex Sakalis):

Here’s how it worked: a contractor would approach the owner of a house and offer him a deal. He would knock down his house, and build a block of flats in its place. In return, the homeowner would be given a certain number of flats (usually two or three), while the contractor would then make his money by selling the remaining flats to Greeks who were seeking accommodation. Generally, no money was exchanged and no contracts were signed.

What’s so incredible about antiparochi is that it emerged spontaneously out of the housing crisis in Athens. “There was no specific law which told people ‘OK now you have the right to collaborate and build whatever you like’. It was the people themselves that found out this possibility,” says Panos Dragonas, professor of Architecture at the University of Patras.

Even more incredibly, the state completely accepted what its citizens had started doing, introducing only a few minor regulations, such as a maximum height for the apartment buildings – known as polykatoikies in Greek – and a ban on building over archaeological sites or on top of Athens’ seven historical hills. There were no property taxes – the state never made any direct income from antiparochi.

The elegance of antiparochi was that it appeared to solve all of Greece’s problems at once. It provided homeowners and home seekers with modern apartments, while creating enough profit for the contractors to continue investing in construction without state subsidies or bank loans.

Photo by Anastase Maragos on Unsplash

A few years ago I wrote a post talking about "depression babies." In it, I cited a research paper that looked at the impact of macroeconomic shocks on people's willingness to take on financial risk in the future. The term "depression babies" stems from the Great Depression and how it is believed to have impacted risk taking, savings rates, and probably many other things.

I was reminded of this when I read this recent article in the WSJ talking about how the Chinese have started spending -- and taking on the debt -- like Americans, particularly among Chinese under 30. It is the inverse of the depression baby phenomenon. In this case, it is arguably years of economic expansion leading to greater comfort around financial risk.

Here are a couple of figures from the article:

JPMorgan estimates China’s ratio of household debt to gross domestic product will climb to 61% by 2020. That’s up from 26% in 2010 and higher than current levels in Italy and Greece.

The level in the U.S. is about 76%, after falling from 98% in 2006, according to the International Monetary Fund.

By another measure—the ratio of household debt to disposable income—China appears to have already surpassed the U.S. Its ratio reached 117.2% in 2018, up from 42.7% in 2008, according to calculations by Lei Ning, a researcher at the Institute for Advanced Research at Shanghai University of Finance and Economics. The U.S. peaked at 135% in 2007 and dropped to 101% in 2018.

Not surprisingly, the article goes on to talk about how this dramatic increase in household debt might be something to worry about. Maybe. I'm not an economist. But I do think this is designed to boost the Chinese growth machine and I do think it makes them less reliant on other countries -- such as, maybe, the United States.