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Even the Rich Are Being Priced Out of Central London

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Re: Even the Rich Are Being Priced Out of Central London

#211

Post by davidf18 »

legulere wrote: post #200
davidf18 wrote: post #141

The reason that housing is increasing in cost is because of a market failure where politics is used to create housing scarcity, called "economic rents." In this case, the use of politics to create zoning laws that place artificial restrictions on housing density. As in any form of "economic rents", this benefits a special interest group -- in this case the landlords over the general population of rents and buyers of…

The zoning story is pretty much bullshit and is told by developers that want to replace the buildings with even lower density, shittier but still pricier buildings. The Eixample district in Catalonia has one of the highest population densities in the western world without high-rises: https://en.wikipedia.org/wiki/Eixample Its population density is higher than the one in Manhattan and probably also any parts of the ot…

Actually, if you read the references by the economists that I cite, in most situations the developers want to maximize profits which means building for higher density. In much of Manhattan, for example, there are many areas with low 6 story brownstones that could be replaced by higher towers, but the zoning laws don't permit this. In London, where I have lived for about 6 months altogether and in the American cities I mention, the issue is bad use of land because of poor zoning codes.

I lack the experience to comment on the situation that you mention relating to Catalan.

Re: Even the Rich Are Being Priced Out of Central London

#212

Post by TheSpiceIsLife »

grkvlt wrote: post #210
TheSpiceIsLife wrote: post #137

Can anyone explain the purported benefits to society of allowing non-resident foreigners to own residential property? Who is this supposed to benefit? I mean, other than real estate agents, solicitors / conveyancer, and the initial citizen who sold the property. What prevents us (whoever 'us' is in your case) from banning foreign non-resident residential property ownership.

Banning foreign non-residential ownership is insane! You apparently want to live in a world where people are not allowed to buy a holiday cottage in France? Or prevent people from buying a city pied-a-terre and a country house? If I have the money, and I want to purchase another house in another country or city, I should absolutely be able to do so, and I cannot imagine a world where this would ever not be the case..…

True, good point. I might conjecture that not-banning non-resident ownership is proving to be a bit wobbly too though.

I suppose I should say something like: as we more in to a world where more and more people have the ability to access foreign residential property as an investment class we might need to rethink the rules around foreign non-resident property ownership for residential property, under some circumstances, perhaps, maybe.

Re: Even the Rich Are Being Priced Out of Central London

#213

Post by 001sky »

paulddraper wrote: post #209
001sky wrote: post #199

Earlier quoted context omitted.

public policy variables are outside the market efficiency hypotheisis because. markets are therfore not efficient wrt to public policy in general. they only are efficient with repsect to a specificially dilineated (analytically tractavle) public policy context at a single points of time.

And specifically what externality do you think is at play here?

Market effeciency concepts have to do with incorporating information into a (well defined) market. Breaking the logic sequence of "well defined market", which can be done with trivial levels of "real world complexity", is problematic for EMH. This means you cant use EMH as a sort of backward logic to defend the status quo.

As to the concept of a market externality, I'm not sure I understand the question. If you just mean "uncaptured incentives", well surely there are myriads. But the bigger point is that this is not a simple solution. You cannot re-solve the maths as per a case of omitted variable bias.

The reason that this is so may be intuively grasped with an example. Let us posit that rent-seeking is a behavioral consequence of 'opportunistic' principals. And that rent seeking public policy architects are inevitable, because our politician is opportunistic (qua politician--behavioral assumption).

OK, but now I've just made mess for EMH, and this is why EMH has an 'H' in its name. Because general economic theory requires that we assume away several things we just introduced. And if you understand EMH you understand why having opportunistic, strongly authorized, unrestrained public policy makers is a problem. Namely, (1) they hold private information (outside emh); and (2) they are free to play zero-sum dynamic games with market participants; and (3) they can charge economic rents by implementing a 'protection racket' scheme whereby donor/lobbyists avoid (large) zero-sum losses by taking (smaller) zero-sum losses that benefit the policy holder (so called diversions).

Re: Even the Rich Are Being Priced Out of Central London

#214

Post by Grishnakh »

stuaxo wrote: post #187
Grishnakh wrote: post #87

Earlier quoted context omitted.

There absolutely is, but no one seems to believe it's possible. It's called SkyTran personal rapid transit. Wikipedia has a page all about it here: https://en.wikipedia.org/wiki/SkyTran With small maglev pods traveling 100-150 mph, a 100-mile commute is actually quite doable in one of these, especially since you can sleep in it as it's automated and takes you door-to-door. If governments would actually invest in this…

There is no way that would get planning permission in central London. It would have to be underground.

You don't need SkyTran in dense city centers; it can't handle the volume of people that a subway can. SkyTran is an alternative for cars; it can handle a lot more people than cars, and in a far more efficient manner. It's not meant for extremely dense areas, except perhaps as an alternative to taxis (i.e., in places like London or Manhattan, it would have to more expensive than the subways and cater to richer people). The main use-case for SkyTran is for suburbs, inter-city transport (between cities close enough to drive), etc.

Re: Even the Rich Are Being Priced Out of Central London

#215

Post by [deleted] »

billmalarky wrote: post #125
mabbo wrote: post #83

Earlier quoted context omitted.

The same logic works for all Protectionist legislation. Yet free trade has lowered the costs of nearly every good in our lives.

Free trade maximizes GDP at the cost of further wealth inequality within the closed system of a nation. There's a tipping point coming fairly soon where voters will logically prefer the short term benefits of protectionism vs additional inequality. If capitalists want to continue down the path of free trade, they better be prepared to redistribute the additional wealth generated. That or find a way to disenfranchise…

[deleted]

Re: Even the Rich Are Being Priced Out of Central London

#216

Post by leviathant »

tcoppi wrote: post #114
leviathant wrote: post #105

Earlier quoted context omitted.

The same thing's happening in Philadelphia, so no doubt New York and DC are running out of places to snatch up. It's insane. I landed a pretty sweet deal on an old building close to the Delaware River for ~$265,000. A vacant lot near us sold for about the same a couple of years before that. This year, the lot behind us went on the market for $600,000 - a number I thought was pretty absurd. But two days after it had b…

If you aren't particularly attached to the area/house, it might be time to cash out and move somewhere more reasonable.

Without getting too into the details, we're improving a small performing arts space on the first floor, a little apartment on the second floor, and building larger apartment on the third floor. If I were doing this for cash, I'd have just built five stories of apartments, and could retire somewhere boring and suburban as an absentee landlord. This is more of a 'fostering the arts' and 'living in a walkable urban environment' thing.

They say you can make a small fortune in theater - you start with a big fortune. You build a theater, and now you've got a small fortune ;)

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